Financial Statements for Qiang Company Appear Below Total Dividends Paid During Year 2 Were $61,000,of Which $12,000

question 125

Essay

Financial statements for Qiang Company appear below:

$\begin{array}{|l|r|}\hline&\begin{array}{r}\text { Qiang Company } \\\text { Income Statement }\\\text { For the Year Ended December 31, Year 2} \\\text { (dollars in thousands) }\end{array} \\\hline \text { Sales (All on Account) } & \$ 1500 \\\hline \text { Costs of Goods Sold } & \$ 1050 \\\hline \text { Gross Margin } & \$ 450 \\\hline \text { Operating Expenses } & \$ 180 \\\hline \text { Net Operating Income } & \$ 270 \\\hline \text { Interest Expense } & \$ 40 \\\hline \text { Net Income before Taxes } & \$ 230 \\\hline \text { Income Taxes (30\%) } & \$ 69 \\\hline \text { Net Income } & \$ 161 \\\hline\end{array}$
Total dividends paid during Year 2 were $61,000,of which $12,000 were for preferred shares.The market price of a common share on December 31,Year 2 was $50.
The preferred shares are convertible to common shares on the basis of four 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 yield ratio.
e)Return on total assets.
f)Return on common shareholders' equity.
g)Book value per share.

---

Definitions:

Willingness-To-Pay

The maximum amount that a consumer is prepared to pay for a good or service.

Technological Advances

The progress in technology that enhances productivity, efficiency, and quality in various industries.

Trade

The act of buying, selling, or exchanging goods and services between people or entities.

Economic Outcome

The result or consequence of economic activities and policies on an economy's overall condition.