Comparative financial statement data of Banfield DVDs, Inc., follow:

Other Information:

1. Market price of Banfield's common stock: \($92.80\) at December 31, 2006, and \($67.50\) at December 31, 2005.

2. Common shares outstanding: 15,000 during 2006 and 14,000 during 2005. 3. All sales on credit.

Requirements 

1. Compute the following ratios for 2006 and 2005:

a. Current ratio

b. Times-interest-earned ratio (p. 86 C. Inventory turnover

d. Return on common stockholders' equity

e. Earnings per share of common stock 

f. Price/earnings ratio

Decide whether

(a) Banfield's ability to pay its debts and to sell inventory improved or deteriorated during 2006 

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

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BANFIELD DVDs, INC. Comparative Income Statement Years Ended December 31, 2006 and 2005 Net sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income tax Income tax expense Net income 2006 2005 $667,000 $599,000 378,000 283,000 289,000 316,000 129,000 147,000 160,000 169,000 37,000 51,000 123,000 118,000 34,000 $ 89,000 53,000 $ 65,000