# Comparative financial statements for Na Pali Coast Company for the years ending December 31, 20-1 and 20-2

## Question:

Comparative financial statements for Na Pali Coast Company for the years ending December 31, 20-1 and 20-2 are provided.

REQUIRED

1. Perform horizontal analysis of the comparative income statement and balance sheet. Round percentages to one decimal place.

2. Perform vertical analysis of the comparative income statement and balance sheet. Round percentages to one decimal place.

3. Compute the following liquidity measures for 20-2 (round all calculations to two decimal places):

(a) Working capital

(b) Current ratio

(c) Quick or acid-test ratio

4. Compute the following activity measures for 20-2 (round all calculations to two decimal places):

(a) Accounts receivable turnover and average number of days to collect receivables (Assume that sales on account for 20-2 were $120,000.)

(b) Merchandise inventory turnover and average number of days to sell inventory

(c) Asset turnover

5. Compute the following profitability measures for 20-2 (round all calculations to two decimal places):

(a) Profit margin ratio

(b) Return on assets

(c) Return on common stockholders' equity

(d) Earnings per share of common stock

6. Compute the following leverage measures for 20-2 (round all calculations to two decimal places):

(a) Debt-to-equity ratio

(b) Times interest earned ratio (Assume interest expense for 20-2 was $1,200.)

7. Compute the following market measures for 20-2 (round all calculations to two decimal places):

(a) Price-earnings ratio (The market price of Na Pali Coast Company's common stock was $23.00 on December 31, 20-2.)

(b) Book value per share of commonstock

Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...

## Step by Step Answer:

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