Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Additional information:

1. The market price of Jergan's common stock was \(\$ 7.00, \$ 7.50\), and \(\$ 8.50\) for 2023,2024 , and 2025 , respectively.

2. You must compute dividends declared. All declared dividends were paid in cash in the year of declaration.

Instructions

a. Compute the following ratios for 2024 and 2025.
1. Profit margin.
2. Gross profit rate.
3. Asset turnover.
4. Earnings per share.
5. Price-earnings ratio.
6. Payout ratio.
7. Debt to assets ratio.

b. Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results from 2024 to 2025 of Jergan Corporation.

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Cash Accounts receivable (net) Other current assets Jergan Corporation Balance Sheets December 31 Investments Property, plant, and equipment (net) Current liabilities Long-term debt Common stock, $10 par Retained earnings 2025 $ 30,000 50,000 90,000 55,000 500,000 $725,000 Sales revenue Less: Sales returns and allowances $ 85,000 145,000 320,000 175,000 $725,000 2024 $ 20,000 45,000 95,000 70,000 370,000 $600,000 Jergan Corporation Income Statements For the Years Ended December 31 Net sales Cost of goods sold Gross profit Operating expenses (including income taxes) Net income $ 80,000 85,000 310,000 125,000 $600,000 2025 $740,000 40,000 700,000 425,000 275,000 180,000 $ 95,000 2023 $ 18,000 48,000 64,000 45,000 358,000 $533,000 $ 70,000 50,000 300,000 113,000 $533,000 2024 $600,000 30,000 570,000 350,000 220,000 150,000 $ 70,000