Comparative financial statements for heritage antiquing

Reference no: EM13571744

Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. 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 $22. 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	$	1,190	$	1,290
Accounts receivable, net		9,200		7,800
Inventory		13,700		11,400
Prepaid expenses		700		650

Total current assets		24,790		21,140

Property and equipment:
Land		9,600		9,600
Buildings and equipment, net		41,306		35,878

Total property and equipment		50,906		45,478

Total assets	$	75,696	$	66,618

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	20,300	$	18,900
Accrued payables		1,040		850
Notes payable, short term		170		170

Total current liabilities		21,510		19,920
Long-term liabilities:
Bonds payable		8,700		8,700

Total liabilities		30,210		28,620

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		39,786		32,298

Total stockholders' equity		45,486		37,998

Total liabilities and stockholders' equity	$	75,696	$	66,618

Heritage Antiquing Services
Comparative Income Statement and Reconciliation
(dollars in thousands)

This Year

Last Year

Sales

69,000

64,000

Cost of goods sold

37,000

41,000

Gross margin

32,000

23,000

Selling and administrative expenses:

Selling expenses

10,500

11,000

Administrative expenses

6,900

6,600

Total selling and administrative expenses

17,400

17,600

Net operating income

14,600

5,400

Interest expense

870

Net income before taxes

13,730

4,530

Income taxes

5,492

1,812

Net income

8,238

2,718

Dividends to preferred stockholders

360

Net income remaining for common stockholders

8,188

2,358

Dividends to common stockholders

700

Net income added to retained earnings

7,488

1,658

Retained earnings, beginning of year

32,298

30,640

Retained earnings, end of year

39,786

32,298

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

1.	Gross margin percentage. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Gross margin percentage

2.	Earnings per share of common stock. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

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

4.	Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place. Omit the "%" sign in your response.)

Dividend payout ratio

5.	Dividend yield ratio. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Dividend yield ratio

6.	Return on total assets. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Return on total assets

7.	Return on common stockholders' equity. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Return on common stockholders' equity

8.	Book value per share. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Book value

$ per share

Reference no: EM13571744

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