As a consultant to MCR Company, you are told it is considering the acquisition of Lakeland Corporation. MCR Company requests that you prepare certain financial statistics and analysis forYear 5 and Year 4 using Lakeland’s financial statements that follow:

1. Inventory at January 1, Year 4, is $6,850,000.
2. Market prices of common stock at December 31, Year 5 and Year 4, are $73.50 and $47.75, respectively.
3. Cash dividends for both preferred and common stock are declared and paid in June and December of each year.
The stock dividend on common stock is declared and distributed in August of Year 5.
4. Plant and equipment disposals during Year 5 and Year 4 are $375,000 and $425,000, respectively. Related accumulated depreciation is $215,000 in Year 5 and $335,000 in Year 4. At December 31, Year 3, the plant and equipment asset balance is $21,470,000, and its related accumulated depreciation is $11,650,000.

Required:
Compute the following financial ratios and figures for both Year 5 and Year 4. Identify and discuss any significant year-to-year changes.
At December 31:For year ended December 31:
a. Current ratio.
b. Acid-test ratio.
c. Book value per common share.
d. Gross profit margin ratio.
e. Days to sell inventory.
f. Times interest earned.
g. Common stock price-to-earnings ratio (end-of-year value).
h. Gross capitalexpenditures.

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LAKELAND CORPORATION Balance Sheet December 31, Year 5 and Year4 Year 5 Year 4 Assets Current assets 1,610,000 1,387,000 Cash Marketable securities Accounts receivable, less allowance for bad debts 510,000 Inventories, at lower of cost or market. Prepaid expenses Total current assets 4,075,000 .1,250,000 125,000 3,669,000 7,050,000 218,000 13,570,00012,324,000 Plant and equipment, at cost Land and buildings Machinery and equipment Total plant and equipment Less: Accumulated depreciation Total plant and equipment-net. 13,500,000 13,500,000 8,520,000 22,750,000 22,020,000 13,470,000 12,549,000 9,471,000 250,000 75,000 9,250,000 9,280,000 250,000 Long-term receivables Deferred charges 25,000 Total assets $23,125,000 $22,120,000 Liabilities and Shareholders' Equity Current liabilities Accounts payable... Accrued expenses Federal taxes payable Current maturities on long-term debt Total current liabilities 1,575,000 875,000 500,000 5,900,000 2,950,000 3,426,000 1,644,000 750,000 500,000 6,320,000 Other liabilities 5% sinking fund debentures, due January 1: Year 16 ($500,000 redeemable annually Deferred taxes on income, due to depreciation Total other liabilities 5,500,000 210,000 5,000,000 350,000 5,350,000 5,710,000 Shareholders' equity Preferred stock, $1 cumulative, $20 par, preference on liquidation $100 per share (authorized: 100,000 shares: 1,000,000 issued and outstanding: 50,000 shares) Common stock, $1 par (authorized: 900,000 shares; 1,000,000 issued and outstanding: Year 5, 550,000 shares; Year 4,500,000 shares) Capital in excess of par value on common stock Retained earnings Total shareholders' equity 550,000 3,075,000 7,250,000 11,875,000 500,000 625,000 7,965,000 10,090,000 $23,125,000 $22,120,000 Total liabilities and shareholders' equity . . . . .