2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise i

Question

2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured s 31,900 34,400 37,000 89,600 64, 600 54,100 96,191 83,900 57,300 10,861 10,282 3, 626 326,448 286, 818 167,974 $555,000 $480,000 $320,000 $136,813 S 80,309 S 41,395 by mortgages on plant assets 102,253 108,192 69,306 162,500 162,500 162,500 153,434 128,999 46,799 Total liabilities and equity $555,000 $480,000 $320,000 Common stock, $10 par value Retained earnings The company's income statements for the years ended December 31, 2017 and 2016, follow For Year Ended December 31 Sales 2017 2016 $721,500 $571,200 $440,115 223, 665 12,266 9,380 $371,280 144,514 13,138 Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 8,568 685,426 S 36,074 $2.22 537,500 $ 33,700 $ 2.07 Earnings per share

Explanation / Answer

Solution :- Price earnings ratio = Market price per share / Earnings per share.

Return on common stockholders' equity = Net income / Average common stockholders' equity

Average common stockholders' equity for Year 2017 = [ (162500 + 153434) + (162500 + 128999) ] / 2

= [ 315934 + 291499 ] / 2

= 607433 / 2

= $ 303716.50

Average common stockholders' equity for Year 2016 = [ (162500 + 128999) + (162500 + 46799) ] / 2

= [ 291499 + 209299 ] / 2

= 500798 / 2

= $ 250399.

Dividend Yield = Annual Dividend per share / Stock price per share.

Year Price earnings ratio 2017 30 / 2.22 = 13.51 2016 28 / 2.07 = 13.53

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