Question

The comparative financial statements for Prince Company are below:

	Year 2				Year 1
Income statement:
Sales revenue	$	206,000			$	171,000
Cost of goods sold		116,000				101,600
Gross profit		90,000				69,400
Operating expenses and interest expense		57,600				53,800
Pretax income		32,400				15,600
Income tax		9,600				4,800
Net income	$	22,800			$	10,800
Balance sheet:
Cash	$	5,600			$	7,800
Accounts receivable (net)		14,800				18,800
Inventory		41,600				34,800
Property and equipment (net)		47,400				39,600
Total assets	$	109,400			$	101,000
Current liabilities (no interest)	$	16,800			$	17,800
Long-term liabilities (10% interest)		45,800				45,800
Common stock ($5 par value, 6,320 shares outstanding)		31,600				31,600
Retained earnings		15,200				5,800
Total liabilities and stockholders' equity	$	109,400			$	101,000

Assume that the stock price per share is $36 and that dividends in the amount of $7.50 per share were paid during Year 2. Compute the following ratios: (Round your answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)

Earnings per share
Current ratio
Quick ratio
Cash ratio
Price/earnings ratio
Dividend yield ratio	20.83	%

Answer 1