The financial statements for Castile Products, Inc., are given Castile Products,

Question

The financial statements for Castile Products, Inc., are given Castile Products, Inc. Balance Sheet Current assets %2.000 Accounts receivable, met 360.000 Prepaid expenses Total current assets Property and equipment, ne Total assets 1,513.000 Liabilities and Stockholders Equity 250,000 Cumrent liablities Bonds payable, 10% Total Sabiliies Stockholders equity s 150.000 Common stock, $5 par value Retained eaming Total stockholders equity Total Sabilibies and equty 1,513.000 Castle Products, Inc income Statement $2.280,000 Cost of goods sold Gross margi 1,080,000 10,000 Net operating income Interest expense 470,000 37,000 Net income belore taxes Income taxes (30%) 29.900 Net income 303100 Account balances at the beginning of the year were: accounts receivable, $200,000; and inventory, $350,000. All sales were on Assume that Castile Products, Inc., paid dividends of $2.75 per share during the year. Also assume that the company's common stock had a market price of $55 at the end of the year and there was no change in the number of outstanding shares of common stock during the year

Explanation / Answer

Castile Products Inc. Formulas 1) Earning Per share=(Net Income-Preferred Dividend)/Number of shares outstanding 2) Dividend Payout Ratio=(Dividend Per share/Earnings per Share) 3) Dividend Yield Ratio=(Dividend Per share/Market Price Per share) 4) Price Earning Ratio=Market Price Per Share/Eps 5) Book Value Per Share=(Total Shareholder's Equity-Preferred Equity)/Total Outstanding Shares Net Income after tax $ 303,100.00 Dividend Per share $               2.75 Market Price Per Share $            55.00 Common stock Outstanding=($150000/$5) 30000 Total Shareholder's Equity= $ 893,000.00 1) Earnigns Per Share=($303100/30000) 10.10 2) Dividend Payout Ratio=($2.75/$10.10) 27% 3) Dividend Yield Ratio=($2.75/$55) 5% 4) Price Earnings Ratio=($55/$10.10) 5.44 5) Book Value Per share=($893000/30000) $            29.77

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