p15 26a comparative financial statement data of danfield inc follow 500626

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

2. Decide (a) whether Danfield’s ability to pay debts and to sell inventory improved or deteriorated during 2012 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.

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