Jens Hardware Inc.'s financial statements for the year ended December 31, 2017, are shown below:

JENS HARDWARE INC.
Income Statement
For the Year Ended December 31, 2017
Net sales ........................... $330,000
Cost of goods sold .................. 190,000
Gross margin ....................... 140,000
Operating expenses:
Selling expenses ..................... 40,000
Administrative expenses .......... 23,000
Interest expense ................... 6,000
Total operating expenses ......... 69,000
Operating income ................... 71,000
Income taxes (30%) .............. 21,300
Net income ......................... $ 49,700

Required
1. Perform a horizontal analysis of the comparative balance sheets. Comment on the analysis.
2. Perform a vertical analysis of the income statement. The industry standards are a gross margin of 45 percent and net income of 15 percent. Comment on the analysis.
3. Calculate each of the following ratios for the year ended December 31, 2017. The industry standards are provided in parentheses for some of the ratios.
a. Current ratio (2:1)
b. Acid-test ratio
c. Inventory turnover
d. Days' sales in receivables
e. Debt ratio (0.47)
f. Times-interest-earned ratio
g. Rate of return on net sales
h. Rate of return on total assets
i. Rate of return on common shareholders' equity
j. Price-earnings ratio-the market price per share is $9.00 at year end, when dividends were paid (14.0)
k. Dividend yield (4%)
4. Comment on your calculations for Jens Hardware Inc. Include comments for those ratios for which industry standards were provided.

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JENS HARDWARE INC. Balance Sheet December 31,2017 and 2016 2017 2016 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses Property, plant, and equipment $21,600 15,600 21,000 42,000 1,500 170,000 157,000 (34,000) (24,000) 15,000 $244,650 $228,100 33,050 38,000 1,000 Accumulated amortization Goodwill Total assets Liabilities Accounts payable Notes payable (due in 30 days) Mortgage payable 15,000 $15,000 2,000 40,000 57,000 18,500 3,500 45,000 67,000 Total liabilities Shareholders' equity Preferred shares (8,000 shares; $2.00, callable at $15.00 per share) 2016-8,000 shares) Total shareholders' equity 48,000 48,000 Common shares (2017-12,000 shares; 65,000 48,100 161,100 $244,650 $228,100 81,000 58,650 187,650 Retained earnings Total liabilities and shareholders' equity JENS HARDWARE INC. Statement of Retained Earnings For the Year Ended December 31, 2017 Retained earnings, January 1, 2017 Add net income for 2017 $48,100 49,700 97,800 Less dividends: Preferred $16,000 23,150 39,150 $58,650 Common Retained earnings, December 31, 2017