2017 2016 2015 At December 31 Assets Cash Accounts receivabl

2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured s 31,900 34,400 37,000 89,600 64, 600 54,100 96,191 83,900 57,300 10,861 10,282 3, 626 326,448 286, 818 167,974 $555,000 $480,000 $320,000 $136,813 S 80,309 S 41,395 by mortgages on plant assets 102,253 108,192 69,306 162,500 162,500 162,500 153,434 128,999 46,799 Total liabilities and equity $555,000 $480,000 $320,000 Common stock, $10 par value Retained earnings The company\'s income statements for the years ended December 31, 2017 and 2016, follow For Year Ended December 31 Sales 2017 2016 $721,500 $571,200 $440,115 223, 665 12,266 9,380 $371,280 144,514 13,138 Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 8,568 685,426 S 36,074 $2.22 537,500 $ 33,700 $ 2.07 Earnings per share

Solution

Solution :- Price earnings ratio = Market price per share / Earnings per share.

Return on common stockholders\' equity = Net income / Average common stockholders\' equity

Average common stockholders\' equity for Year 2017 = [ (162500 + 153434) + (162500 + 128999) ] / 2

= [ 315934 + 291499 ] / 2

= 607433 / 2

= $ 303716.50

Average common stockholders\' equity for Year 2016 = [ (162500 + 128999) + (162500 + 46799) ] / 2

= [ 291499 + 209299 ] / 2

= 500798 / 2

= $ 250399.

Dividend Yield = Annual Dividend per share / Stock price per share.

Year	Price earnings ratio
2017	30 / 2.22 = 13.51
2016	28 / 2.07 = 13.53