Following are data from the financial statements for Drury Lane Company:

Instructions:
1. Compute the following for 2010 and 2011.
(a) Return on sales
(b) Return on assets
(c) Return on equity
(d) Cash-flow-to-net-income ratio
(e) Cash flow adequacy ratio
(f) Cash times interest earned ratio
2. In which year did Drury Lane Company perform better, 2010 or 2011? Explain your answer.
3. Drury Lane Company intends to sell a large block of newly issued stock to the public in the first half of 2012. Given your computations in (1), what questions would you like to ask of Drury Lane€™s management before investing in the newly issuedstock?

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Drury Lane Company Selected Financial Statement Data For the Years Ended December 31, 2011 and 2010 (In millions of dollars) 2011 2010 Sales Total assets Stockholders equity Net income Cash from operations Cash paid for capital expenditures Cash paid for acquisitions Cash paid for interest Cash paid for income taxes $90,000 .105,000 34.000 9.200 12.300 13,100 2,800 1,800 3,300 $85,000 32.000 8.500 19.800 2,900 900 1,500 3,000