Calculate income statement of sales for last 3 years. Explain the strengths and weaknesses of income statement. Calculate Dividend payout ratio and explain how dividends
Calculate income statement of sales for last 3 years. Explain the strengths and weaknesses of income statement. Calculate Dividend payout ratio and explain how dividends impact the retained earnings/equity of the company.
Sales for last 3 years from previous to recent were; $6.25 million, $5.4 million and $4.5 million.
Cost of goods sold for each year was 60% of sales. All other operating expenses were 30% pf sales for each year.
The company had depreciation of $225,000 for each of the last 3 years. The depreciation expense amount us included in the operating expenses.
The company purchased fixed assets of $250,000 during last 3 years.
The current owner and sole shareholder declared a dividend of 12% of sales for last 3 years. Note, the dividend is in addition to the cost of goods sold and operating expenses.
Total assets of the business have an original cost of $2.75 million
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