P15-26a comparative financial statement data of danfield, inc.,

Comparative financial statement data of Danfield, Inc., follow:
 

Danfield, Inc.
 

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Comparative Income Statement
 

Years Ended December 31, 2012 and 2011
 

 
2012
2011
 

Net sales
467,000
428,000
 

Cost of goods sold
237,000
218,000
 

Gross profit
230,000
210,000
 

Operating expenses
136,000
134,000
 

Income from operations
94,000
76,000
 

Interest expense
9,000
10,000
 

Income before income tax
85,000
66,000
 

Income tax expense
24,000
27,000
 

Net income
61,000
39,000
 

 
 
 
 

 Danfield, Inc. 

 Comparative Balance Sheet

 Years Ended December 31, 2012 and 2011 

   
2012
2011
 2010* 

 Current assets: 
   
   
 

 Cash 
            97,000
            95,000
 

 Current receivables, net 
          112,000
          118,000
          102,000

 Inventories 
          145,000
          163,000
          203,000

 Prepaid expenses 
            12,000
             5,000
 

 Total current assets 
          366,000
          381,000
 

 Property, plant, and equipment, net 
          211,000
          179,000
 

 Total assets 
          577,000
          560,000
          598,000

 
 
 
 

 Total current liabilities 
          225,000
          246,000
 

 Long-term liabilities 
          114,000
            97,000
 

 Total liabilities 
          339,000
          343,000
 

 Preferred stock, 3% 
          108,000
          108,000
 

 Common stockholders’ equity, no par 
          130,000
          109,000
 

 Total liabilities and stockholders’ equity 
          577,000
          560,000
 

 
 
 
 

* Selected 2010 amounts
 
   
   

1. Market price of Danfield’s common stock: $86.58 at December 31, 2012 and $46.54 at December 31, 2011.

2. Common shares outstanding: 12,000 during 2012 and 10,000 during 2011 and 2010.

3. All sales on credit.
 
 
 

 
 
 
 

Requirements
 
 
 

1.  Compute the following ratios for 2012 and 2011:
 
 

a.  Current ratio
 
 
 

b.  Times-interest-earned ratio
 
 
 

c.  Inventory turnover
 
 
 

d.  Gross profit percentage
 
 
 

e.  Debt to equity ratio
 
 
 

f.  Rate of return on common stockholders’ equity
 
 

g.  Earnings per share of common stock
 
 

h.  Price/earnings ratio