Use the Following Selected Financial Data from the Balance Sheet

question 133

Essay

Use the following selected financial data from the balance sheet at the end of Year 2 and Year 1:
$\begin{array}{lcc}&\text { June 30, Year } 2&\text { June 30, Year } 1\\\text { Total current liabilities } & \$ 495,000 & \$ 320,000 \\\text { Bonds payable } & 600,000 & 500,000 \\\text { Common shares } & 800,000 & 800,000 \\\text { Retained earnings } & 200,000 & 100,000\\\text { Total shareholders' equity }&1,000,000&900,000\\\text { Total liabilities and shareholders' equity }&2,095,000&1,720,000\end{array}$
Net income for Year 2 and Year 1 was $120,000 and $460,000,respectively.No shares were issued during either year,but dividends of $20,000 and $16,000 were paid in Year 2 and Year 1,respectively.
A) What is return on common equity ratio for Year 2?
B) What is the dividend payout ratio for Year 2?
C) What is the earnings per share measure for Year 2?
D) What other shareholder ratios would be helpful in assessing information of interest to shareholdlere?

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