Comparative financial statements for the Rahul Corporation for the year ended December 31 are given below. A total of 500,000 shares of stock were outstanding. The market value of the company€™s stock at the end of the year was $25.

Rahul Corporation
Comparative Income Statement and Reconciliation of Retained Earnings
For the Year Ended December 31, 2012 and 2011

Required
Compute the following financial ratios for the year 2012:
a. Gross margin percentage.
b. Earnings per share.
c. Price€“earnings ratio.
d. Return on total assets.
e. Return on common stockholders €˜equity.
Comment on theresults.

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Rahul Corporation Comparative Balance Sheet For the Year Ended December 31,2012 and 2011 2012 2011 Assets Current assets: Cash Accounts receivable net Inventory Prepaid expenses 2,200 10,870 13,860 820 27,750 2,470 7,725 12,155 620 22,970 Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets 11,000 40,400 51,400 $79,150 11,000 42,400 53,400 $76,370 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued expenses Notes payable, short term $20,600 780 $18,650 640 210 19,500 Total current liabilities Long-term liabilities: 21,380 Bonds payable 11,000 32,380 11,000 30,500 Total liabilities Stockholders' equity: Preferred stock Common stock Additional paid-in capital Total paid-in capital Retained earnings 2,100 4,200 7,350 13,650 33,120 46,770 $79,150 2,100 4,200 7350 13,650 32,220 45,870 $76,370 Total stockholders' equity Total liabilities and stockholders' equity 2012 2011 Sales Cost of goods sold Gross margin Operating expenses $84,500 56,900 27,600 $83,000 56,600 26,400 Selling expenses Administrative expenses Total operating expenses Income from operations Interest expense Income before taxes Less income taxes Net income Dividends to preferred shareholders Net income remaining for common stockholders Dividends to common stockholders Net income added to retained earnings Retained earnings, beginning of the year Retained earnings, end of the year 14,400 8,800 23,200 4400 1,200 3,200 1,280 1,920 440 1,480 580 900 32,220 $33,120 13,500 8,400 21,900 4,500 1,000 3,500 1,400 2,100 520 1,580 580 1,000 31,220 $32,220