Question

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




1. Market price of Banfield’s common stock: $ 49.50 at December 31, 2014, and $ 27.02 at December 31, 2013
2. Common shares outstanding: 12,000 during 2014 and 12,000 during 2013
3. All sales are credit sales

Requirements
1. Compute the following ratios for 2014 and 2013:
a. Current ratio
b. Times- interest- earned ratio
c. Inventory turnover
d. Return on common stockholders’ equity
e. Earnings per share of common stock
f. Price/ earnings ratio
2. Decide
(a) Whether Banfield’s ability to pay debts and to sell inventory improved or deteriorated during 2014 and
(b) Whether the investment attractiveness of its common stock appears to have increased ordecreased.


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  • CreatedAugust 27, 2014
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