Question

Condensed balance sheet and income statement data for Landwehr Corporation appear below.


Additional information:
1. The market price of Landwehr’s common stock was $4.00, $5.00, and $8.00 for 2013, 2014, and 2015, respectively.
2. All dividends were paid in cash.

Instructions
(a) Compute the following ratios for 2014 and 2015.
(1) Profit margin.
(2) Asset turnover.
(3) Earnings per share. (Weighted-average common shares in 2015 were 32,000 and in 2014 were 31,000.)
(4) Price-earnings ratio.
(5) Payout ratio.
(6) Debt to assets ratio.
(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2014 to 2015 of LandwehrCorporation.


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  • CreatedJanuary 30, 2014
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