price earnings ratio 458798

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Shull Corporation’s most recent balance sheet and income statement appear below:

Shull corporation statement of Financial position

December 31, Year 2 and Year 1 (dollars in thousands)

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Current assets………………………………Year 2…..Year 1

Cash…………………………………………$ 180……$ 150

Accounts Receivable………………………..200………190

Inventory……………………………………..140………140

Prepaid expenses……………………………100………90

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Total current assets…………………………620………570

Plant & equipment, net……………………..780………800

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Total assets……………………………….$1,400…..$1,370

Current liabilities:

Accounts payable…………………………..$ 110……$ 130

Accrued liabilities……………………………..80……….70

Notes payable, short term…………………..60……….60

=

Total current liabilities………………………250………260

Bonds payable………………………………..220………240

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Total liabilities………………………………..470………500

Stockholders’ equity:

Preferred stock, $100 par value, 5%……….200……….200

Common Stock, $2 par value………………..400………..400

Additional paid-in capital–common stock…100………..100

Retained earnings……………………………..230………..170

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Total stockholders’ equity……………………930………..870

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Total liabilities & stockholders equity……$1,400…….$1,370

Shull Corporation Income Statement

For the Year Ended December 31, Year 2 (Dollars in thousands)

Sales (all on account)………………..$1,130

Cost of goods sold……………………..700

=

Gross margin…………………………….430

Selling and administrative expense….244

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Net operating income…………………..186

Interest expense………………………..29

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Net income before taxes………………157

Income taxes (30%)……………………47

=

Net income…………………………….$110

Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock total $10 thousand. The market price of common stock at the end of the year 2 was $9.80 per share.

Find the price earnings ratio for year 2

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