Condensed balance sheet and income statement data for Clarence Corporation appear below.

Additional information:1. The market price of Clarence?s common stock was $4.00, $5.00, and $8.00 for 2011, 2012, and 2013, respectively.

2. All dividends were paid in cash.

Instructions(a) Compute the following ratios for 2012 and 2013.(1) Profit margin.(2) Asset turnover.(3) Earnings per share. (Weighted-average common shares in 2013 were 32,000 and in 2012 were 31,000.)(4) Price-earnings.(5) Payout.(6) Debt to total assets.(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2012 to 2013 of Clarence Corporation.

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CLARENCE CORPORATION Balance Sheets December 31 2013 2012 2011 $ 25,000 $ 20,000 $ 18,000 Cash Receivables (net) 50,000 45,000 48,000 Other current assets 90,000 95,000 64,000 Investments 75.000 70,000 45.000 Plant and equipment (net) 370,000 400,000 358,000 $533.000 $600,000 $640,000 $ 75,000 $ 80,000 $ 70,000 Current liabilities Long-term debt Common stock, $10 par Retained earnings 80,000 85,000 50,000 310,000 125,000 340,000 300,000 145,000 113,000 $600,000 $533,000 $640,000 CLARENCE CORPORATION Income Statement For the Years Ended December 31 2013 2012 $740,000 $700,000 Sales revenue Less: Sales returns and allowances 40,000 50,000 Net sales 700,000 650,000 400,000 Cost of goods sold 420,000 Gross profit Operating expenses (including income taxes) 280,000 250,000 235,000 220,000 $ 45,000 $ 30.000 Net income