Condensed statement of financial position and income statement data for

Condensed statement of financial position and income statement data for Clarence Corporation appear below.

Clarence Corporation
of Financial Position
December 31

2014 2013 2012 Plant and equipment (net) $400,000 75,000 90,000 50,000 $370,000 70,000 95,000 45,000 20,000 $358,000 45,

Clarence Corporation
Income Statement
For the Years Ended December 31

2014 2013 Sales revenue Less: Sales returns and allowances Net sales Cost of goods sold Gross profit Operating expenses

Additional information: 
1. The market price of Clarence€™s ordinary shares was $4.00, $5.00, and $8.00 for 2012, 2013, and 2014, respectively.
2. All dividends were paid in cash.

(a) Compute the following ratios for 2013 and 2014.
(1) Profit margin.
(2) Asset turnover.
(3) Earnings per share. (Weighted-average ordinary shares in 2014 were 32,000 and in  2013 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 2013 to 2014 of Clarence Corporation.

A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...


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