Financial Statements for Praeger Company Appear Below Dividends During Year 2 Totalled $45,000,of Which $10,000 Were Preferred

question 155

Essay

Financial statements for Praeger Company appear below:

$\begin{array}{|l|r|}\hline&\text {Praeger Company}\\&\text {Income Statemen}\\&\text {For the Year Ended December 31, Year}\\&2\\&\text {(dollars in thousands)}\\\hline \text { Sales (All on Account) } & \$ 100 \\\hline \text { Costs of Goods Sold } & \$ 770 \\\hline \text { Gross Margin } & \$ 330 \\\hline \text { Operating Expenses } & \$ 130 \\\hline \text { Net Operating Income } & \$ 200 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 150 \\\hline \text { Income Taxes }(30 \%) & \$ 45 \\\hline \text { Net Income } & \$ 105 \\\hline\end{array}$

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.

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Definitions:

Visual Illusion

A misleading image or visual trick that perceives the brain into seeing something different from the actual reality.

Sensation

The process by which our sensory receptors and nervous system receive and represent stimulus energies from our environment.

Stimulus Attributes

Characteristics or features of a stimulus that can influence an individual's response or perception.

Lower-Order

Pertaining to basic or fundamental processes that do not involve complex cognitive operations.