Comparative financial statement data of Tanfield, Inc. follow:

1. Market price of Tanfield’s common stock: $ 86.58 at December 31, 2015, and $ 46.54 at December 31, 2014.
2. Common shares outstanding: 12,000 during 2015 and 10,000 during 2014 and 2013.
3. All sales are on credit.

1. Compute the following ratios for 2015 and 2014:
a. Current ratio
b. Cash ratio
c. Times-interest-earned ratio
d. Inventory turnover
e. Gross profit percentage
f. Debt to equity ratio
g. Rate of return on common stockholders’ equity
h. Earnings per share of common stock
i. Price/ earnings ratio
2. Decide
(a) Whether Tanfield’s ability to pay debts and to sell inventory improved or deteriorated during 2015
(b) Whether the investment attractiveness of its common stock appears to have increased ordecreased.

  • CreatedJanuary 16, 2015
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