Condensed balance sheet and income statement data for Pitka Corporation arepresented here:

Additional information:1. The market price of Pitka's common stock was \(\$ 4.00, \$ 5.00\), and \(\$ 7.95\) for 1996,1997 ,and 1998 , respectively.2. All dividends were paid in cash.3. On July 1, 1997, 4,000 shares of common stock were issued.Instructions

(a) Compute the following ratios for 1997 and 1998(1) Profit margin(5) Price-earnings(2) Gross profit(6) Payout(3) Asset turnover(7) Debt to total assets(4) Earnings per share

(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof inthe financial position and operating results from 1997 to 1998 of Pitka Corpora-tion.

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PITKA CORPORATION Balance Sheet December 31 1998 1997 Cash $ 25,000 $ 20,000 1996 $ 18,000 Receivables (net) 50,000 45,000 48,000 Other current assets 90,000 85,000 64,000 Investments 75,000 70,000 45,000 Plant and equipment (net) 400,000 370,000 358,000 $640,000 $590,000 $533,000 Current liabilities $ 75,000 $ 80,000 $ 70,000 Long-term debt 80,000 Common stock, $10 par 340,000 85,000 300,000 50,000 300,000 Retained earnings 145,000 125,000 113,000 $640,000 $590,000 $533,000