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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
Assets
Current assets
Cash
Accounts receivable, net
Inventory
Other current assets
Total current assets
Property, plant, & equipment, net
Total assets
2012
$347,000
$417,500
1,067,900
776,400
725,000
681,050
382,000
247,000
2,521,900
2,121,950
10,254,305
8,403,645
$12,776,205 $10,525,595
Liabilities and Stockholders’ Equity
Current liabilities
$3,194,000 $2,846,100
Long-term debt
3,702,700
3,892,650
Total liabilities
6,896,700
6,738,750
Preferred stock, $5 par value
51,900
51,900
Common stock, $0.25 par value
194,000
103,850
Retained earnings
5,633,605
3,631,095
Total stockholders’ equity
5,879,505
3,786,845
Total liabilities and stockholders’ equity $12,776,205 $10,525,595
Matthias Medical
Comparative Income Statement and Statement of Retained Earnings
For the Year
2013
2012
Sales revenue (all on account)
$10,910,000 $9,614,000
Cost of goods sold
4,250,000
5,298,800
Gross profit
6,660,000
4,315,200
Operating expenses
2,840,200
2,634,200
Net operating income
3,819,800
1,681,000
Interest expense
314,000
308,650
Net income before taxes
3,505,800
1,372,350
Income taxes (30%)
Net income
1,051,740
$2,454,060
411,705
$960,645
Dividends paid
Preferred dividends
Common dividends
Total dividends paid
Net income retained
Retained earnings, beginning of year
Retained earnings, end of year
29,550
422,000
451,550
2,002,510
3,631,095
$5,633,605
29,550
421,000
450,550
510,095
3,121,000
$3,631,095
Calculate the earnings per share (average of 441,000 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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