The following data are taken from the records of John Spencer Corporation.

Required:
1. Compute the following ratios for 2011 and 2012:
a. Current ratio
b. Debt ratio
c. Asset turnover
d. Return on sales
e. Return on equity
2. Have the firm€™s performance and financial position improved from 2011 to 2012?Explain.

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John Spencer Corporation Comparative Balance Sheet December 31, 2012 and 2011 2012 2011 Assets: $ 4,000 16,000 40,000 100,000 16,000 $ 6,000 14,000 20,000 100,000 20,000 Cash Accounts receivable Inventory Property, plant, and equipment Other assets Total assets $176,000 $160,000 Liabilities and stockholders' equity: $ 4,000 24,000 60,000 $ 50,000 10,000 60,000 40,000 Current liabilities. Long-term liabilities Paid-in capital Retained earnings. Total liabilities and stockholders' equity. 48,000 $160,000 $176,000 John Spencer Corporation Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2012 2011 Sales.. Cost of goods sold. $530,000 372,000 $158,000 102,000 $448,000 338,000 $110,000 68,000 Gross margin on sales Operating expense $ 56,000 4,000 $ 52,000 13,000 $ 42,000 2,000 Operating income. Interest expense. $ 40,000 12,000 Income before taxes. Income taxes $ 39,000 S 28,000 Net income