Condensed balance sheet and income statement data for Pitka Corporation arepresented here: Additional information:1. The market price

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

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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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Financial Accounting Tools For Business Decision Making

ISBN: 9780471169192

1st Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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