3. Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page A+

Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. The company did not issue any new common or preferred stock during the year. A total of 500 thousand shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $1.00. The market value of the company’s common stock at the end of the year was $22. All of the company’s sales are on account.

Heritage Antiquing Services

Comparative Balance Sheet

(dollars in thousands)

This Year Last Year

Assets

Current assets:

Cash $ 1,120 $ 1,390

Accounts receivable, net 10,900 7,200

Inventory 13,500 11,100

Prepaid expenses 660 580

Total current assets 26,180 20,270

Property and equipment:

Land 11,000 11,000

Buildings and equipment, net 42,310 40,340

Total property and equipment 53,310 51,340

Total assets $ 79,490 $ 71,610

Liabilities and Stockholders\’ Equity

Current liabilities:

Accounts payable $ 20,000 $ 19,300

Accrued payables 1,070 720

Notes payable, short term 210 210

Total current liabilities 21,280 20,230

Long-term liabilities:

Bonds payable 9,000 9,000

Total liabilities 30,280 29,230

Stockholders\’ equity:

Preferred stock 1,000 1,000

Common stock 500 500

Additional paid-in capital 4,000 4,000

Total paid-in capital 5,500 5,500

Retained earnings 43,710 36,880

Total stockholders\’ equity 49,210 42,380

Total liabilities and stockholders\’ equity $ 79,490 $ 71,610

Required:

Compute the following financial ratios for common stockholders for this year:

1. Gross margin percentage.

2. Earnings per share of common stock.

3. Price-earnings ratio.

4. Dividend payout ratio.

5. Dividend yield ratio.

6. Return on total assets.

7. Return on common stockholders\’ equity.

8. Book value per share.

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