The condensed comparative income statements of Ada Corporation appear below. The corporation’s condensed comparative balance sheets follow. All figures are given in thousands of dollars except earnings per share and market price per share. Additional data for Ada in 2012 and 2011 are as follows:

Balances of selected accounts at the end of 2010 were accounts receivable (net), $52,700; inventory, $99,400; accounts payable, $64,800; total assets, $647,800; and stockholders’ equity, $376,600. All of the bonds payable were long-term liabilities.

REQUIRED

Perform the following analyses for 2012 and 2011. (Note: Round percentages and ratios to one decimal place.)

1. Prepare a profitability and total asset management analysis by calculating for each year the

(a) Profit margin,

(b) Asset turnover,

(c) Return on assets.

2. Prepare a liquidity analysis by calculating for each year the

(a) Cash flow yield,

(b) Cash flows to sales,

(c) Cash flows to assets,

(d) Free cash flow.

3. Prepare a financial risk analysis by calculating for each year the

(a) Debt to equity ratio,

(b) Return on equity,

(c) Interest coverage ratio.

4. Prepare an operating asset management analysis by calculating for each year the

(a) Inventory turnover,

(b) Days’ inventory on hand,

(c) Receivable turnover,

(d) Days’ sales uncollected,

(e) Payables turnover,

(f) Days’ payable

(g) Current ratio,

(h) Quick ratio.

5. Prepare a market strength analysis by calculating for each year the

(a) Price/earnings (P/E) ratio

(b) Dividends yield.

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Net cash flows from operating activities Net capital expenditures Dividends paid Number of common shares Market price per share 2012 64,000 $119,000 $31,400 2011 $99,000 $38,000 $35,000 30,000 30,000 80.00 $120.00 Ada Corporation Comparatlve Income Statements For the Years Ended December 31, 2012 and 2011 2012 2011 Net sales Cost of goods sold Gross margin Operating expenses $800,400 454,100 $346,300 $742,600 396,200 $346,400 $130,100 140,300 $270400 $ 75,900 25,000 50,900 14,000 S 36,900 1.23 Selling expenses 104,600 115,500 $220,100 $126,300 20,000 $106,300 35,000 $ 71,300 5 2.38 Administrative expenses Total operating expenses Income from operations Interest expense Income before income taxes Income taxes expense Net income Earnings per share Ada Corporation Comparative Balance Sheets December 31,2012 and 2011 2012 2011 Assets Cash 31,100 72,500 122,600 577,700 $803,900 27,200 42,700 107,800 507,500 $685,200 Accounts receivable (net) Property, plant, and equipment (net) Total assets Liabilities and Stockholders Equity Accounts payable Notes payable Bonds payable Common stock, $10 par value Retained earnings Total liabilities and stockholders'equity $104,700 50,000 200,000 300,000 149,200 $803,900 S 72,300 50,000 110,000 300,000 152,900 $685,200