The following are financial statements of Ohara Company.

Additional information: The weighted-average common shares outstanding during the year was 50,000.

Instructions

a. Compute the following values and ratios for 2025. (We provide the results from 2024 for comparative purposes.)

(i) Working capital. (2024: $160,500)

(ii) Current ratio. (2024: 1.65:1)

(iii) Debt to assets ratio. (2024: 31%)

(iv) Earnings per share. (2024: $3.15)

b. Using your calculations from part (a), discuss changes from 2024 in liquidity, solvency, and profitability.

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Ohara Company Income Statement For the Year Ended December 31, 2025 Net sales Cost of goods sold Selling and administrative expenses Interest expense Income tax expense Net income $2,218,500 1,012,400 906,000 78,000 69,000 $ 153,100