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Exercise 12-11 Matthias Medical manufactures hospital beds and other institutional furniture. The company’s comparative balance sheet and income statement for 2012 and 2013 follow.

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Exercise 12-11 Matthias Medical manufactures hospital beds and other institutional furniture. The company’s comparative balance sheet and income statement for 2012 and 2013 follow.

Matthias Medical
Comparative Balance Sheet
As of December 31
2013 2012
Assets
Current assets
  Cash $373,000 $417,400
  Accounts receivable, net 1,065,900 776,500
  Inventory 748,000 681,000
  Other current assets 396,000 247,100
Total current assets 2,582,900 2,122,000
Property, plant, & equipment, net 8,977,605 8,484,895
  Total assets $11,560,505 $10,606,895
Liabilities and Stockholders’ Equity
Current liabilities $3,198,000 $2,846,100
Long-term debt 3,702,600 3,892,650
  Total liabilities 6,900,600 6,738,750
Preferred stock, $5 par value 57,100 57,100
Common stock, $0.25 par value 100,000 103,900
Retained earnings 4,502,805 3,707,145
  Total stockholders’ equity 4,659,905 3,868,145
  Total liabilities and stockholders’ equity $11,560,505 $10,606,895
Matthias Medical
Comparative Income Statement and Statement of Retained Earnings
For the Year
2013 2012
Sales revenue (all on account) $10,580,000 $9,613,950
Cost of goods sold 5,579,000 5,298,750
  Gross profit 5,001,000 4,315,200
Operating expenses 2,840,200 2,634,150
Net operating income 2,160,800 1,681,050
Interest expense 392,000 308,700
Net income before taxes 1,768,800 1,372,350
Income taxes (30%) 530,640 411,705
Net income $1,238,160 $960,645
Dividends paid
  Preferred dividends 29,500 29,500
  Common dividends 413,000 417,000
  Total dividends paid 442,500 446,500
Net income retained 795,660 514,145
Retained earnings, beginning of year 3,707,145 3,193,000
Retained earnings, end of year $4,502,805 $3,707,145
Calculate the earnings per share (average of 417,000 shares outstanding for the year) for 2013. (Round answer to 2 decimal places, e.g. 2.55.)

Earning per share $ per share
Calculate the price/earnings ratio (market price of $45 at year-end) for 2013. (Round answer to 2 decimal places, e.g. 2.55.)

Price/earnings ratio
Calculate the dividend payout ratio (dividends of $1.04 per common share for the year) for 2013. (Round answer to 2 decimal places, e.g. 2.55%.)

Dividend payout ratio %
 
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