Condensed balance sheet and income statement data for Landwehr Corporation appear below.

Additional information:

1. The market price of Landwehr’s common stock was $4.00, $5.00, and $8.00 for 2016, 2017, and 2018, respectively.

2. All dividends were paid in cash.

Instructions

(a) Compute the following ratios for 2017 and 2018.

(1) Profit margin.

(2) Asset turnover.

(3) Earnings per share. (Weighted-average common shares in 2018 were 32,000 and in 2017 were 31,000.)

(4) Price-earnings ratio.

(5) Payout ratio.

(6) Debt to assets ratio.

(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2017 to 2018 of Landwehr Corporation.

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LANDWEHR CORPORATION Balance Sheets December 31 2018 2017 2016 $ 25,000 $ 20,000 45,000 95,000 70,000 370,000 $ 18,000 48,000 Cash Accounts receivable (net) Other current assets 50,000 90,000 75,000 400,000 64,000 45,000 358,000 Investments Plant and equipment (net) $640,000 $600,000 $533,000 $ 80,000 $ 70,000 50,000 $ 75,000 80,000 340,000 145,000 Current liabilities Long-term debt Common stock, $10 par Retained earnings 85,000 310,000 300,000 125,000 113,000 $640,000 $600,000 $533,000