Comparative financial statement data of Danfield Furniture Company follow:
Other information follows:
1. Market price of common shares was $48.50 at December 31, 2014, and $31.75 at December 31, 2013.
2. Common shares outstanding were 17,000 during 2014 and 15,000 during 2013.
3. All sales were made on credit.
4. The full amount of preferred dividends was paid.
1. Compute the following ratios for 2014 and 2013:
a. Current ratio
b. Inventory turnover
c. Accounts receivable turnover
d. Times-interest-earned ratio
e. Return on common shareholders’ equity
f. Earnings per share of common shares
g. Price/earnings ratio
2. Decide
(a) Whether Danfield Furniture Company’s financial position improved or deteriorated during 2014
(b) Whether the investment attractiveness of its common shares appears to have increased or decreased.
3. Flow will what you learned in this problem help you evaluate an investment?

  • CreatedJuly 08, 2015
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