Recent financial statements for Madison Company follow:
Madison Company
Balance Sheet
June 30 |
| Assets |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
| Cash |
|
|
|
$ |
22,000 |
|
| Accounts receivable, net |
|
|
|
|
180,000 |
|
| Merchandise inventory |
|
|
|
|
370,000 |
|
| Prepaid expenses |
|
|
|
|
12,000 |
|
|
|
|
|
|
|
|
| Total current assets |
|
|
|
|
584,000 |
|
| Plant and equipment, net |
|
|
|
|
820,000 |
|
|
|
|
|
|
|
|
| Total assets |
|
|
|
$ |
1,404,000 |
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
| Current liabilities |
|
|
|
$ |
290,000 |
|
| Bonds payable, 10% |
|
|
|
|
330,000 |
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
|
|
620,000 |
|
| Stockholders' equity: |
|
|
|
|
|
|
| Common stock, $10 par value |
$ |
170,000 |
|
|
|
|
| Retained earnings |
|
614,000 |
|
|
|
|
|
|
|
|
|
|
|
| Total stockholders' equity |
|
|
|
|
784,000 |
|
|
|
|
|
|
|
|
| Total liabilities and stockholders' equity |
|
|
|
$ |
1,404,000 |
|
|
|
|
|
|
|
|
|
Madison Company
Income Statement
For the Year Ended June 30 |
| Sales |
$ |
2,200,000 |
|
| Cost of goods sold |
|
1,250,000 |
|
|
|
|
|
| Gross margin |
|
950,000 |
|
| Selling and administrative expenses |
|
660,000 |
|
|
|
|
|
| Net operating income |
|
290,000 |
|
| Interest expense |
|
33,000 |
|
|
|
|
|
| Net income before taxes |
|
257,000 |
|
| Income taxes |
|
77,100 |
|
|
|
|
|
| Net income |
$ |
179,900 |
|
|
|
|
|
|
|
Account balances at the beginning of the company's fiscal year were: accounts receivable, $230,000; and inventory, $270,000. All sales were on account.
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|
Assume that Madison Company paid dividends of $4.05 per share during the year. Also assume that the company's common stock had a market price of $68.00 per share on June 30 and that there was no change in the number of outstanding shares of common stock during the fiscal year.
|
| Required: |
| Compute the following: |
| 1. |
Earnings per share. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
|
| 2. |
Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.Omit the "%" sign in your response.)
|
| 3. |
Dividend yield ratio. (Round your answer to 1 decimal place.Omit the "%" sign in your response.) |
| 4. |
Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)
|