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Recent financial statements for Madison Company follow: |
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Madison Company Balance Sheet June 30 |
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| Assets | ||||||
| Current assets: | ||||||
| Cash | $ | 24,000 | ||||
| Accounts receivable, net | 260,000 | |||||
| Merchandise inventory | 380,000 | |||||
| Prepaid expenses | 8,000 | |||||
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| Total current assets | 672,000 | |||||
| Plant and equipment, net | 820,000 | |||||
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| Total assets | $ | 1,492,000 | ||||
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| Liabilities and Stockholders’ Equity | ||||||
| Liabilities: | ||||||
| Current liabilities | $ | 270,000 | ||||
| Bonds payable, 8% | 360,000 | |||||
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| Total liabilities | 630,000 | |||||
| Stockholders’ equity: | ||||||
| Common stock, $5 par value | $ | 150,000 | ||||
| Retained earnings | 712,000 | |||||
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| Total stockholders’ equity | 862,000 | |||||
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| Total liabilities and stockholders’ equity | $ | 1,492,000 | ||||
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Madison Company Income Statement For the Year Ended June 30 |
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| Sales | $ | 2,290,000 | |
| Cost of goods sold | 1,170,000 | ||
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| Gross margin | 1,120,000 | ||
| Selling and administrative expenses | 580,000 | ||
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| Net operating income | 540,000 | ||
| Interest expense | 28,800 | ||
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| Net income before taxes | 511,200 | ||
| Income taxes | 153,360 | ||
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| Net income | $ | 357,840 | |
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Account balances at the beginning of the company’s fiscal year were: accounts receivable, $190,000; and inventory, $280,000. All sales were on |
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Assume that Madison Company paid dividends of $3.35 per share during the year. Also assume that the company’s common stock had a market price |
| Required: |
| Compute the following: |
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Earnings per share. (Round your answer to 2 decimal places. Omit |
| Earnings per share | $ |
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Dividend payout ratio. (Round your intermediate calculations to 2 |
| Dividend payout ratio | % |
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Dividend yield ratio. (Round your answer to 1 decimal place.Omit the “%” sign in your response.) |
| Dividend yield ratio | % |
| 4. |
Price-earnings ratio. (Round your intermediate calculations to 2 |
| Price-earnings ratio |
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