Griffin Company

Statement of Financial Position

12/31/12 12/31/11

Assets

Cash $ 40,000 $ 10,000

Accounts Receivable $ 30,000 $ 55,000

Inventory $110,000 $ 70,000

Property, plant and equipment $250,000 $257,000

Total Assets $430,000 $392,000

Liabilities and Stockholder’s Equity

Current liabilities $ 60,000 $ 50,000

5% morgage payable $120,000 $162,000

Common stock (30,000 shares) $150,000 $150,000

Retained earnings $100,000 $ 30,000

Total Liabilities and stockholders’ equity $430,000 $392,000

Griffin Company

Income Statement For the Year Ended December 31, 2012

Sales on account $420,000

Less expenses:

Cost of goods sold $214,000

Salary expense $ 50,000

Depreciation expnese $ 7,000

Interest expense $ 9,000

Total expenses $280,000

Income before taxes $140,000

Income tax expense (50%) $ 70,000

Net income $ 70,000

Compute the following rations for the Griffin Company for the year ending December 31, 2012:

A. Profit margin ration (before interest and taxes)

B. Total asset turnover

C. Rate of return on total assets

D. Rate of return on common stockholders’ equity

E. Earnings per share of stock

F. Inventory turnover

G. Current ratio

H. Quick ratio

I. Accounts receivable turnover

J. Debt-to-equity ratio

K. Times interest earned

In addition to calculating and provided answers letters A through K, answer the following questions:

1) What conclusions can you draw regarding this company’s performance?;

2) Do you believe you have enough information to make a thorough analysis? Take into considerations the benefits of trend analysis.