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

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Na Pali Coast Company Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 $466,451 285,889 $180,562 20-1 $291,613 Net sales Cost of goods sold Gross profit Operating expenses Operating income Other expenses Income before income taxes 188,626 $102,987 78,200 $ 24,787 500 125,650 $ 54,912 1,200 $ 53,712 18,250 $ 35,462 $ 24,287 7,285 $ 17,002 Income tax expense Net income Na Pali Coast Company Comparative Balance Sheet December 31, 20-2 and 20-1 20-2 20-1 Assets Current assets: $ 8,600 3,000 10,500 53,600 4,500 $ 80,200 $ 7,500 2,000 8,600 33,200 3,200 $ 54,500 Cash Government notes Accounts receivable (net) Merchandise inventory Supplies and prepayments Total current assets Property, plant, and equipment: Land Building (net) Delivery equipment (net) Office equipment (net) $ 40,000 200,000 13,000 $ 40,000 150,000 15,000 6,000 6,000 $217,000 $271,500 5,400 Patents 5,000 $263,400 $343,600 Total property, plant, and equipment Total assets 20-2 20-1 Liabilities Current liabilities: $ 5,000 28,700 4,200 $ 3,000 22,300 Notes payable Accounts payable Accrued and withheld payroll taxes Accrued interest payable Total current liabilities 5,600 500 1,700 $ 32,600 $ 38,400 Long-term liabilities: Bonds payable Total liabilities 50,000 $ 88,400 20,000 $ 52,600 Stockholders' Equity Common stock ($5 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $115,000 65,000 75,200 $255,200 $343,600 $100,000 60,000 58,900 $218,900 $271,500