Chapter D, Problem 27AP

Comparative financial statement data of Sanfield, Inc. follow:

* Selected 2016 amounts

1. 1. Market price of Sanfield’s common stock: $51.48 at December 31, 2018, and $37.08 at December 31, 2017.
2. 2. Common shares outstanding: 16,000 on December 31, 2018 and 15,000 on December 31, 2017 and 2016.
3. 3. All sales are on credit

Requirements

1. 1. Compute the following ratios for 2018 and 2017:
   1. a. Current ratio
   2. b. Cash ratio
   3. c. Times-interest-earned ratio
   4. d. Inventory turnover
   5. e. Gross profit percentage
   6. f. Debt to equity ratio
   7. g. Rate of return on common stockholders’ equity
   8. h. Earnings per share of common stock
   9. i. Price/earnings ratio
2. 2. Decide (a) whether Sanfield’s ability to pay debts and to sell inventory improved or deteriorated during 2018 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.