The financial statements for the Ozzie Company are presented below.
$The financial statements for the Ozzie Company are presented below. The common stock was outstanding the entire year and is selling for $28 per share at year-end.The company has declared and paid dividends of $4.00 per share for the year.The income tax rate is 40%.Assume a business year of 360 days.Balances for certain items at December 31, 2010, were: \begin{array}{lr} \text { Inventory } & \$ 48,000 \\ \text { Total assets } & 260,000 \\ \text { Total stockholders' equity } & 157,200 \end{array} Required: Based on the data provided for Ozzie Company, compute the following ratios for 2011: \begin{array}{ll} \text { a. } & \text { price/e arrings } \\ \text { b. } & \text { dividend yield } \\ \text { c. } & \text { profit margin } \\ \text { d. } & \text { return on total as sets } \\ \text { e. } & \text { current } \\ \text { f. } & \text { inventory turnover } \\ \text { g. } & \text { debt } \end{array}$ The common stock was outstanding the entire year and is selling for $28 per share at year-end.The company has declared and paid dividends of $4.00 per share for the year.The income tax rate is 40%.Assume a business year of 360 days.Balances for certain items at December 31, 2010, were:
$157,200\begin{array}{lr}\text { Inventory } & \$ 48,000 \\\text { Total assets } & 260,000 \\\text { Total stockholders' equity } & 157,200\end{array}$
Required:
Based on the data provided for Ozzie Company, compute the following ratios for 2011:
$\begin{array}{ll}\text { a. } & \text { price/e arrings } \\\text { b. } & \text { dividend yield } \\\text { c. } & \text { profit margin } \\\text { d. } & \text { return on total as sets } \\\text { e. } & \text { current } \\\text { f. } & \text { inventory turnover } \\\text { g. } & \text { debt }\end{array}$

Question

The financial statements for the Ozzie Company are presented below.
$The financial statements for the Ozzie Company are presented below. The common stock was outstanding the entire year and is selling for $28 per share at year-end.The company has declared and paid dividends of $4.00 per share for the year.The income tax rate is 40%.Assume a business year of 360 days.Balances for certain items at December 31, 2010, were: \begin{array}{lr} \text { Inventory } & \$ 48,000 \\ \text { Total assets } & 260,000 \\ \text { Total stockholders' equity } & 157,200 \end{array} Required: Based on the data provided for Ozzie Company, compute the following ratios for 2011: \begin{array}{ll} \text { a. } & \text { price/e arrings } \\ \text { b. } & \text { dividend yield } \\ \text { c. } & \text { profit margin } \\ \text { d. } & \text { return on total as sets } \\ \text { e. } & \text { current } \\ \text { f. } & \text { inventory turnover } \\ \text { g. } & \text { debt } \end{array}$ The common stock was outstanding the entire year and is selling for $28 per share at year-end.The company has declared and paid dividends of $4.00 per share for the year.The income tax rate is 40%.Assume a business year of 360 days.Balances for certain items at December 31, 2010, were:

157,200\begin{array}{lr}\text { Inventory } & \$ 48,000 \\\text { Total assets } & 260,000 \\\text { Total stockholders' equity } & 157,200\end{array}

Required:
Based on the data provided for Ozzie Company, compute the following ratios for 2011:

\begin{array}{ll}\text { a. } & \text { price/e arrings } \\\text { b. } & \text { dividend yield } \\\text { c. } & \text { profit margin } \\\text { d. } & \text { return on total as sets } \\\text { e. } & \text { current } \\\text { f. } & \text { inventory turnover } \\\text { g. } & \text { debt }\end{array}

Lauryn williams · Accepted Answer

Final Answer :  a.   $ 28 / [ $ 25 , 800 / ( $ 60 , 000 / 10 ) ] = $ 28 / $ 4.30 = 6.51 ‾  \$ 28 /[\$ 25,800 /(\$ 60,000 / 10)]=\$ 28 / \$ 4.30=\underline{6.51}  $28/ [ $25 , 800/ ( $60 , 000/10 )] = $28/$4.30 = 6.51 ​   timesb.   $ 4 / $ 28 = 14.3 % ‾  \$ 4 / \$ 28=\underline{14.3 \%}  $4/$28 = 14.3% ​ c.   $ 25 , 800 / $ 650 , 000 = 4.00 % (  rounded)  ‾  \$ 25,800 / \$ 650,000=\underline{4.00 \%(	ext { rounded) }}  $25 , 800/$650 , 000 = 4.00% (  rounded)  ​ d.   { $ 25 , 800 + [ $ 8 , 000 − ( $ 8 , 000 ⋅ 0.4 ) ] } / [ ( $ 270 , 000 + $ 260 , 000 ) / 2 ] = 11.5 % ‾  \quad\{\$ 25,800+[\$ 8,000-(\$ 8,000 \cdot 0.4)]\} /[(\$ 270,000+\$ 260,000) / 2]=\underline{11.5 \%}  { $25 , 800 + [ $8 , 000 − ( $8 , 000 ⋅ 0.4 )]} / [( $270 , 000 + $260 , 000 ) /2 ] = 11.5% ​ e.   ( $ 10 , 000 + $ 16 , 000 + $ 20 , 000 + $ 50 , 000 ) / $ 61 , 000 = 1.57 ‾  (\$ 10,000+\$ 16,000+\$ 20,000+\$ 50,000) / \$ 61,000=\underline{1.57}  ( $10 , 000 + $16 , 000 + $20 , 000 + $50 , 000 ) /$61 , 000 = 1.57 ​   times $ 400 , 000 / [ ( $ 48 , 000 + $ 50 , 000 ) / 2 ] = 8.16 ‾  \$ 400,000 /[(\$ 48,000+\$ 50,000) / 2]=\underline{8.16}  $400 , 000/ [( $48 , 000 + $50 , 000 ) /2 ] = 8.16 ​   timesg.   ( $ 61 , 000 + $ 50 , 000 ) / $ 270 , 000 = 41.7 %  \quad(\$ 61,000+\$ 50,000) / \$ 270,000=41.7 \%  ( $61 , 000 + $50 , 000 ) /$270 , 000 = 41.7%

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