Jens Hardware Inc.'s financial statements for the year ended December 31, 2014, are shown below.

Required
1. Perform a horizontal analysis of the comparative balance sheets. Comment on the analysis.
2. Perform a vertical analysis of the comparative balance sheets. The industry standards are a gross margin of 45 percent and net income of 15 percent. Comment on the analysis.
3. Calculate each of the following ratios for the year ended December 31, 2014. The industry standards are provided in parentheses for some of the ratios.
a. Current ratio (2:1) g. Rate of return on net sales
b. Acid-test ratio h. Rate of return on total assets
c. Inventory turnover i. Rate of return on common shareholders' equity
d. Days' sales in receivables
e. Debt ratio (0.47)
f. Times-interest-earned ratio
j. Price/earnings ratio-the market price per share is $9.00 at year end, when dividends were paid (14.0)
k. Dividend yield (4%)
4. Comment on your calculations for Jens Hardware Inc. Include comments for those ratios for which industry standards were provided

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JENS HARDWARE INC Income Statement For the Year Ended December 31, 2014 Net sales $330,000 190,000 140,000 Cost of goods sold Operating expenses Selling expenses 40,000 23,000 Administrative expenses Interest expense Total operating expenses 69,000 71,000 21,300 $ 49,700 Operating income Income taxes (30%) Net income JENS HARDWARE INC. Statement of Retained Earnings For the Year Ended December 31, 2014 Retained earnings, January 1, 2014 Add net income for 2014 $48,100 97,800 Less dividends: Preferred $16,000 23,150 39,150 Retained earnings, December 31, 2014 JENS HARDWARE INC. Balance Sheet December 31, 2014 and 2013 2014 2013 21,600 s 15,600 Accounts receivable Merchandise inventory Prepaid expenses Property, plant, and equipment 157,000 Total assets Liabilities Accounts payable Notes payable (due in 30 days) Mortgage payable $15,000 $ 18,500 40,000 45,000 Total liabilities Shareholders' equity Preferred shares (8,000 shares; $200, callable at 57,000 67,000 $15.00 per share) Common shares (2014-12,000 shares, 2013-8,000 shares) Retained earnings 48,100 161,100 $228,100 Total shareholders' equity 187,650 Total liabilities and shareholders equity $244,650