Solution-Discuss used the cash proceeds to purchase

Discuss used the cash proceeds to purchase treasury stock

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Reference no: EM131758501

Cepeda Company manufactures backpacks. During 2014, Cepeda issued bonds at 11% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Cepeda Company for the years 2014 and 2013.

2014	2013
Sales revenue	$12,114,000	$12,114,000
Net income	3,015,040	3,365,000
Interest expense	708,000	198,240
Tax expense	901,820	1,009,500
Dividends paid on common stock	1,260,240	1,452,816
Dividends paid on preferred stock	424,800	424,800
Total assets (year-end)	19,517,000	22,713,750
Average total assets	22,213,500	25,152,408
Total liabilities (year-end)	8,496,000	4,248,000
Avg. total common stockholders' equity	13,310,400	19,965,600

(a) Use the information above to calculate the following ratios for both years: (Round answers to 1 decimal place, e.g. 12.5% or 12.5.)

2014		2013
(i)	Return on assets		%	%
(ii)	Return on common stockholders' equity		%	%
(iii)	Payout ratio		%	%
(iv)	Debt to assets ratio		%	%
(v)	Times interest earned		times	times

Reference no: EM131758501

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Discuss used the cash proceeds to purchase treasury stock

Reference no: EM131758501

Reference no: EM131758501

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