MIDTERM EXAMINATION: FINANCIAL MANAGEMENT I

Financial statements for Prasken Company appear below:

Prasken Company
Statement of Financial Position
December 31, Year 2 and Year 1
(Pesos in thousands)
Year 2 Year 1
Current assets:
Cash and marketable securities P130 P120
Accounts receivable, net 180 180
Inventory 170 180
Prepaid expenses 20 20
Total current assets 500 500
Noncurrent assets:
Plant & equipment, net 2,000 1,930
Total assets P2,500 P2,430
Current liabilities:
Accounts payable 130 160
Accrued liabilities 30 60
Notes payable, short term 130 130
Total current liabilities 290 350
Noncurrent liabilities:
Bonds payable 310 300
Total liabilities P600 P650
Stockholders’ equity:
Preferred stock, P10 par, 10% 100 100
Common stock, P10 par 180 180
Additional paid-in capital--common stock 160 160
Retained earnings 1,460 1,340
Total stockholders’ equity 1,900 1,780
Total liabilities & stockholders’ equity P2,500 P2,430

Prasken Company
Income Statement
For the Year Ended December 31, Year 2
(Pesos in thousands)

Sales (all on account) P2,300

Cost of goods sold 1,610
Gross margin 690
Operating expenses 270
Net operating income 420
Interest expense 30
Net income before taxes 390
Income taxes (30%) 117
Net income P 273

Dividends during Year 2 totaled P153 thousand, of which P10 thousand were preferred
dividends. The market price of a share of common stock on December 31, Year 2 was P210.

Required:
Compute the following for Year 2:

36. Earnings per share of common stock.

37. Price-earnings ratio.
38. Dividend payout ratio.
39. Dividend yield ratio.
40. Return on total assets.
41. Return on common stockholders' equity.
MIDTERM EXAMINATION: FINANCIAL MANAGEMENT I
42. Book value per share.
43. Working capital.
44. Current ratio.
45. Acid-test (quick) ratio.
46. Accounts receivable turnover.
47. Average collection period (age of receivables).
48. Inventory turnover.
49. Average sale period (turnover in days).
50. Times interest earned.
MIDTERM EXAMINATION: FINANCIAL MANAGEMENT I