Financial Statements for Praeger Company Appear Below $\quad$ $\quad$

Essay

Financial statements for Praeger Company appear below:
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Praeger Company
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Statement of Financial Position
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ December 31 , Year 2 and Year 1
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ (dollars in thousands)

$\begin{array}{l}\begin{array}{lrr}&\text { Year 2}&\text { Year1 }\\\text { Current assets: }\\\text { Cash and marketable securities } & \$ 100 & \$ 100 \\\text { Accounts receivable, net } & 170 & 170 \\\text { Inventory } & 110 & 110 \\\text { Prepaid expenses } & \underline{60} & \underline{60} \\\text { Total current assets } & 440 & 440\\\\\text {Noncurrent assets:}\\\text {Plant \& equipment, net}&2020&1990\\\text {Total assets}&\$2460&\$2430\\\end{array}\end{array}$
$\begin{array}{l}\text { Current liabilities: }\\\begin{array}{lll}\text { Accounts payable } & \$ 140 & \$ 170 \\\text { Accrued liabilities } & 70 & 50 \\\text { Notes payable, short term } & \underline{100} & \underline{120} \\\quad \text { Total current liabilities } & 310 & 340\\\\\text { Nonourrent liabilities: }\\\text { Bonds payable }&500&500\\\text { Total liabilities }&810&840\\\\\text { Shareholders' equity: }\\\text { Preferred shares, \$5 par, } 5 \% & 100 & 100 \\\text { Common shares, \$5 par } & 200 & 200 \\\text { Additional paid-in capital-common } & 200 & 200\\\text { shares }\\\text { Retained earnings } & \underline{1.150} & \underline{1.090} \\\text { Total shareholders' equity } & \underline{1.650} & \$ 1590\\\text { Total liabilities \& shareholders' equity }&\$2460&\$2430\end{array}\end{array}$



$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Praeger Company
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Income Statement
$\quad$$\quad$$\quad$ For the Year Ended December 31 , Year 2
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ (dollars in thousands)
$\begin{array}{lr}\text { Sales (all on account) } & \$ 1,100 \\\text { Cost of goods sold } & \underline{770} \\\text { Gross margin } & \underline{330} \\\text { Operating expenses } & \underline{130} \\\text { Net operating income } & 200 \\\text { Interest expense } & \underline{50} \\\text { Net income before taxes } & 150 \\\text { Income taxes (30\%) } & \underline{45} \\\text { Net income } & \$ 105\end{array}$ Dividends during Year 2 totalled $45,000,of which $10,000 were preferred dividends.The market price of a common share on December 31,Year 2 was $30.
The preferred shares are convertible to common shares on the basis of 2 common shares for each preferred share.
Required:
Calculate the following for Year 2:
a)Basic earnings per common share.
b)Fully diluted earnings per common share.
c)Price-earnings ratio (use basic earnings per share).
d)Dividend payout ratio (use basic earnings per share).
e)Dividend yield ratio.
f)Return on total assets.
g)Return on common shareholders' equity.
h)Book value per share.
i)Working capital.
j)Current ratio.
k)Acid-test (quick)ratio.
l.)Accounts receivable turnover.
m)Average collection period (age of receivables).
n)Inventory turnover.
o)Average sale period (turnover in days).
p)Times interest earned.
q)Debt-to-equity ratio.