Comparative financial statements for heritage antiquing

Reference no: EM13572838

Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear below. The company did not issue any new common or preferred stock during the year. A total of 700 thousand shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $1.00. The market value of the company's common stock at the end of the year was $23. All of the company's sales are on account.

Heritage Antiquing Services Comparative Balance Sheet (dollars in thousands)
	This Year		Last Year
Assets
Current assets:
Cash	$	1,140	$	1,290
Accounts receivable, net		9,800		7,600
Inventory		12,600		11,600
Prepaid expenses		780		620

Total current assets		24,320		21,110

Property and equipment:
Land		10,300		10,300
Buildings and equipment, net		39,726		36,158

Total property and equipment		50,026		46,458

Total assets	$	74,346	$	67,568

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	18,600	$	18,600
Accrued payables		1,070		750
Notes payable, short term		190		190

Total current liabilities		19,860		19,540
Long-term liabilities:
Bonds payable		9,700		9,700

Total liabilities		29,560		29,240

Stockholders' equity:
Preferred stock		1,000		1,000
Common stock		700		700
Additional paid-in capital		4,000		4,000

Total paid-in capital		5,700		5,700
Retained earnings		39,086		32,628

Total stockholders' equity		44,786		38,328

Total liabilities and stockholders' equity	$	74,346	$	67,568

Heritage Antiquing Services Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year		Last Year
Sales	$	70,000	$	64,000
Cost of goods sold		39,000		41,000

Gross margin		31,000		23,000

Selling and administrative expenses:
Selling expenses		10,900		10,300
Administrative expenses		7,100		6,800

Total selling and administrative expenses		18,000		17,100

Net operating income		13,000		5,900
Interest expense		970		970

Net income before taxes		12,030		4,930
Income taxes		4,812		1,972

Net income		7,218		2,958
Dividends to preferred stockholders		60		370

Net income remaining for common stockholders		7,158		2,588
Dividends to common stockholders		700		700

Net income added to retained earnings		6,458		1,888
Retained earnings, beginning of year		32,628		30,740

Retained earnings, end of year	$	39,086	$	32,628

Required:
Compute the following financial ratios for common stockholders for this year:

1.	Gross margin percentage. (Round your answer to 1 decimal place.)

Gross margin percentage

2.	Earnings per share of common stock. (Round your answer to 2 decimal places.)

Earnings per share

3.	Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)

Price-earnings ratio

times

4.	Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)

Dividend payout ratio

5.	Dividend yield ratio. (Round your answer to 1 decimal place.)

Dividend yield ratio

6.	Return on total assets. (Round your intermediate calculations to whole numbers and final answer to 1 decimal place.)

Return on total assets

7.	Return on common stockholders' equity. (Round your intermediate calculations to whole numbers and final answer to 1 decimal place.)

Return on common stockholders' equity

8.	Book value per share. (Round your answer to 2 decimal places.)

Book value per share

Reference no: EM13572838

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