Dettroit Corporation's December 31 Balance Sheets
Assets
2008
2007
Cash
$ 72,000
$ 65,000
Accounts receivable
439,000
328,000
Inventories
894,000
813,000
Total current assets
$ 1,405,000
$ 1,206,000
Land and building
238,000
271,000
Machinery
132,000
133,000
Other fixed assets
61,000
57,000
Total assets
$ 1,836,000
$ 1,667,000
Liabilities and equity
Accounts payable
$ 432,000
$ 409,500
Accrued liabilities
170,000
162,000
Total current liabilities
$ 602,000
$ 571,500
Long-term debt
404,290
258,898
Common stock
575,000
575,000
Retained earnings
254,710
261,602
Total liabilities and equity
$ 1,836,000
$ 1,667,000
Dettroit Corporation's December 31 Income Statements
2008
2007
Sales
$ 4,240,000
$ 3,635,000
Cost of goods sold
3,680,000
2,980,000
Gross operating profit
$ 560,000
$ 655,000
General admin. and selling epenses
236,320
213,550
Depreciation
159,000
154,500
Miscellaneous
134,000
127,000
EBT
$ 30,680
$ 159,950
Taxes (40%)
12,272
63,980
Net income
$ 18,408
$ 95,970
Per-Share Data
2008
2007
EPS
$0.80
$4.17
Cash dividends
$1.10
$0.95
Market price (average)
$12.34
$23.57
P/E ratio
15.4
5.65
Number of shares outstanding
23,000
23,000
Once we have this information set, we can calculate the necessary ratios for this analysis.
Ratio Analysis
2008
2007
Industry Avga
Liquidity
Current ratio
2.7
Asset Management
Inventory turnoverb
7.0
Days sales...