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pucelion39Lv1
28 Sep 2019
Nineteen Measures of Solvency and Profitability
The comparative financial statements of Blige Inc. are asfollows. The market price of Blige Inc. common stock was $59 onDecember 31, 2014.
Blige Inc. Comparative Retained EarningsStatement For the Years Ended December 31, 2014 and2013 2014 2013 Retained earnings, January 1 $1,409,100 $1,196,600 Add net income for year 334,400 245,100 Total $1,743,500 $1,441,700 Deduct dividends On preferred stock $10,500 $10,500 On common stock 22,100 22,100 Total $32,600 $32,600 Retained earnings, December 31 $1,710,900 $1,409,100
Blige Inc. Comparative Income Statement For the Years Ended December 31, 2014 and2013 2014 2013 Sales $2,021,210 $1,859,500 Sales returns and allowances 10,060 6,540 Net sales $2,011,150 $1,852,960 Cost of goods sold 747,520 687,720 Gross profit $1,263,630 $1,165,240 Selling expenses $421,760 $527,180 Administrative expenses 359,270 309,620 Total operating expenses 781,030 836,800 Income from operations $482,600 $328,440 Other income 25,400 20,960 $508,000 $349,400 Other expense (interest) 128,000 70,400 Income before income tax $380,000 $279,000 Income tax expense 45,600 33,900 Net income $334,400 $245,100
Blige Inc. Comparative Balance Sheet December 31, 2014 and 2013 Dec. 31,2014 Dec. 31,2013 Assets Current assets Cash $323,880 $344,370 Temporary investments 490,200 570,680 Accounts receivable (net) 357,700 335,800 Inventories 262,800 204,400 Prepaid expenses 61,269 68,870 Total current assets $1,495,849 $1,524,120 Long-term investments 890,861 321,241 Property, plant, and equipment (net) 2,080,000 1,872,000 Total assets $4,466,710 $3,717,361 Liabilities Current liabilities $515,810 $788,261 Long-term liabilities Mortgage note payable, 8%, due 2019 $720,000 $0 Bonds payable, 8%, due 2015 880,000 880,000 Total long-term liabilities $1,600,000 $880,000 Total liabilities $2,115,810 $1,668,261 Stockholders' Equity Preferred $0.70 stock, $20 par $300,000 $300,000 Common stock, $10 par 340,000 340,000 Retained earnings 1,710,900 1,409,100 Total stockholders' equity $2,350,900 $2,049,100 Total liabilities and stockholders' equity $4,466,710 $3,717,361
Required:
Determine the following measures for 2014, rounding to onedecimal place, except for dollar amounts, which should be roundedto the nearest cent. Use the rounded answer of the requirement forsubsequent requirement, if required. Assume 365 days a year.
12. Ratio of net sales to assets 13. Rate earned on total assets % 14. Rate earned on stockholders' equity % 15. Rate earned on common stockholders'equity % 16. Earnings per share on common stock $ 17. Price-earnings ratio 18. Dividends per share of common stock $ 19. Dividend yield %
Nineteen Measures of Solvency and Profitability
The comparative financial statements of Blige Inc. are asfollows. The market price of Blige Inc. common stock was $59 onDecember 31, 2014.
Blige Inc. | ||||||
Comparative Retained EarningsStatement | ||||||
For the Years Ended December 31, 2014 and2013 | ||||||
2014 | 2013 | |||||
Retained earnings, January 1 | $1,409,100 | $1,196,600 | ||||
Add net income for year | 334,400 | 245,100 | ||||
Total | $1,743,500 | $1,441,700 | ||||
Deduct dividends | ||||||
On preferred stock | $10,500 | $10,500 | ||||
On common stock | 22,100 | 22,100 | ||||
Total | $32,600 | $32,600 | ||||
Retained earnings, December 31 | $1,710,900 | $1,409,100 |
Blige Inc. | ||||
Comparative Income Statement | ||||
For the Years Ended December 31, 2014 and2013 | ||||
2014 | 2013 | |||
Sales | $2,021,210 | $1,859,500 | ||
Sales returns and allowances | 10,060 | 6,540 | ||
Net sales | $2,011,150 | $1,852,960 | ||
Cost of goods sold | 747,520 | 687,720 | ||
Gross profit | $1,263,630 | $1,165,240 | ||
Selling expenses | $421,760 | $527,180 | ||
Administrative expenses | 359,270 | 309,620 | ||
Total operating expenses | 781,030 | 836,800 | ||
Income from operations | $482,600 | $328,440 | ||
Other income | 25,400 | 20,960 | ||
$508,000 | $349,400 | |||
Other expense (interest) | 128,000 | 70,400 | ||
Income before income tax | $380,000 | $279,000 | ||
Income tax expense | 45,600 | 33,900 | ||
Net income | $334,400 | $245,100 |
Blige Inc. | |||||||
Comparative Balance Sheet | |||||||
December 31, 2014 and 2013 | |||||||
Dec. 31,2014 | Dec. 31,2013 | ||||||
Assets | |||||||
Current assets | |||||||
Cash | $323,880 | $344,370 | |||||
Temporary investments | 490,200 | 570,680 | |||||
Accounts receivable (net) | 357,700 | 335,800 | |||||
Inventories | 262,800 | 204,400 | |||||
Prepaid expenses | 61,269 | 68,870 | |||||
Total current assets | $1,495,849 | $1,524,120 | |||||
Long-term investments | 890,861 | 321,241 | |||||
Property, plant, and equipment (net) | 2,080,000 | 1,872,000 | |||||
Total assets | $4,466,710 | $3,717,361 | |||||
Liabilities | |||||||
Current liabilities | $515,810 | $788,261 | |||||
Long-term liabilities | |||||||
Mortgage note payable, 8%, due 2019 | $720,000 | $0 | |||||
Bonds payable, 8%, due 2015 | 880,000 | 880,000 | |||||
Total long-term liabilities | $1,600,000 | $880,000 | |||||
Total liabilities | $2,115,810 | $1,668,261 | |||||
Stockholders' Equity | |||||||
Preferred $0.70 stock, $20 par | $300,000 | $300,000 | |||||
Common stock, $10 par | 340,000 | 340,000 | |||||
Retained earnings | 1,710,900 | 1,409,100 | |||||
Total stockholders' equity | $2,350,900 | $2,049,100 | |||||
Total liabilities and stockholders' equity | $4,466,710 | $3,717,361 |
Required:
Determine the following measures for 2014, rounding to onedecimal place, except for dollar amounts, which should be roundedto the nearest cent. Use the rounded answer of the requirement forsubsequent requirement, if required. Assume 365 days a year.
12. Ratio of net sales to assets | ||
13. Rate earned on total assets | % | |
14. Rate earned on stockholders' equity | % | |
15. Rate earned on common stockholders'equity | % | |
16. Earnings per share on common stock | $ | |
17. Price-earnings ratio | ||
18. Dividends per share of common stock | $ | |
19. Dividend yield | % |
Bunny GreenfelderLv2
28 Sep 2019