Comparative financial statement data of Danfield, Inc., follow: 1. Market price of Danfield's common stock : $86.58

Question:

Comparative financial statement data of Danfield, Inc., follow:


DANFIELD, INC. Comparative Income Statement Years Ended December 31, 2012 and 2011 2012 2011 Net sales Cost of goods sol



Comparative financial statement data of Danfield, Inc., follow:



1. Market price of Danfield's common stock: $86.58 at December 31, 2012, and $46.54 at December 31, 2011.
2. Common shares outstanding: 12,000 during 2012 and 10,000 during 2011 and 2010.
3. All sales on credit.
Requirements
1. Compute the following ratios for 2012 and 2011:
(a) Current ratio
(b) Times-interest-earned ratio
(c) Inventory turnover
(d) Gross profit percentage
(e) Debt to equity ratio
(f) Rate of return on common stockholders' equity
(g) Earnings per share of common stock
(h) Price/earnings ratio
2. Decide
(a) Whether Danfield's ability to pay debts and to sell inventory improved or deteriorated during 2012 and
(b) Whether the investment attractiveness of its common stock appears to have increased ordecreased.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

Question Posted: