Comparative financial statement data of Garfield, Inc. follow

1. Market price of Garfield’s common stock: $69.36 at December 31, 2024, and $38.04 at December 31, 2023.
2. Common shares outstanding: 14,000 on December 31, 2024, and 12,000 on December 31, 2023 and 2022.
3. All sales are on credit.
Requirements

1. Compute the following ratios for 2024 and 2023:

a. Current ratio

b. Cash ratio

c. Times-interest-earned ratio

d. Inventory turnover

e. Gross profit percentage

f. Debt to equity ratio

g. Rate of return on common stockholders’ equity

h. Earnings per share of common stock

i. Price/earnings ratio

2. Decide

(a) whether Garfield’s ability to pay debts and to sell inventory improved or deteriorated during 2024 and

(b) whether the investment attractiveness of its common stock appears to have increased or decreased.

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GARFIELD, INC. Comparative Income Statement Years Ended December 31, 2024 and 2023 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Interest Expense Income Before Income Tax Income Tax Expense Net Income 2024 $ 461,000 241,000 220,000 137,000 83,000 9,000 74,000 18,000 $ 56,000 2023 $ 424,000 211,000 213,000 135,000 78,000 13,000 65,000 24,000 $ 41,000