(a) Calculate the earnings per share (average of 425,000 shares outstanding for the year) for 2020. (Round answer to 2 decimal places, e.g. 2.55.)
Earnings per share $
per share
(b) Calculate the price/earnings ratio (market price of $48 at year-end) for 2020. (Round answer to 1 decimal place, e.g. 2.5.)
Price/earnings ratio
(c) Calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020. (Round answer to 1 decimal place, e.g. 2.5.)
Dividend payout ratio
Income statement for 2019 and 2020 follow:
2020
2019
Assets
Current assets
Cash
Accounts receivable, net
Inventory
Other current assets
Total current assets
Property, plant, & equipment, net
Total assets
$367,000
1,026,000
$417,500
776,450
681,000
381,350
247,100
2,491,350
2,122,050
8,767,005
8,439,995
$11,258,355
$10,562,045
Liabilities
Current liabilities
Long-term debt
Total liabilities
Preferred stock, $5 par value
$3,198,000
$2,846,100
3,702,650
3,892,600
$6,900,650
6,738,700
$58,950
58,900
$104,700
103,850
$4,194,055
3,660,595
$4,357,705
3,823,345
$11,258,355
$10,562,045
Retained earnings
2020
2019
$10,177,200
$9,613,950
5,613,250
5,298,800
4,563,950
4,315,150
2,840,250
2,634,200
1,723,700
1,680,950
300,400
308,400
1,423,300
1,372,350
426,990
411,705
$996,330
$960,645
Sales revenue - (all on account)
Cost of goods sold
Operating expenses
Net operating income
Interest expense
Net income before taxes
Income taxes (30%)
Net income
Dividends paid
Preferred dividends
Common dividends
Total dividends paid
$29,500
$29,450
$433,350
$413,000
$462,850
$442,450
$533,460
$518,195
Retained earnings, beginning of year
$3,660,595
$3,142,400
Retained earnings, end of year
$4,194,055
$3,660,595
(a) Calculate eg 2.55J
Earnings per share
per share
(b) Calculate the price
Price/earnings ratio
(c) Calculate the dividend payout ratio (dividends of $1.25 per c 6g 2.5J
Dividend payout ratio
