Use the following financial statements of Precision Co. to complete these requirements.

1. Prepare comparative income statements showing the percent increase or decrease for year 2013 in comparison to year 2012.

2. Prepare common-size comparative balance sheets for years 2013 and 2012.

3. Compute the following ratios as of December 31,2013, or for the year ended December 31,2013, and identify its building block category for financial statement analysis.

a. Current ratio

b. Acid-test ratio

c. Accounts receivable turnover

d. Days’ sales uncollected

e. Inventory turnover

f. Debt ratio g. Debt-to-equity ratio h. Times interest earned i. Profit margin ratio j. Total asset turnover k. Return on total assets l. Return on common stockholders’ equity

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PRECISION COMPANY Comparative Income Statements For Years Ended December 31, 2013 and 2012 Sales... Cost of goods sold Gross profit.. 2013 2012 $2,486,000 $2,075,000 1.523,000 1,222,000 963.000 853.000 Operating expenses Advertising expense 145,000 100,000 Sales salaries expense 240,000 280,000 .. Office salaries expense 165,000 200,000 Insurance expense 100,000 45,000 Supplies expense 26,000 35,000 Depreciation expense 85,000 75,000 Miscellaneous expenses 17,000 15,000 Total operating expenses 778,000 750,000 Operating income 185,000 103,000 Interest expense 44,000 46,000 Income before taxes 141,000 57,000 Income taxes 47,000 19,000 Net income 94,000 $ 38,000 Earnings per share.... 0.99 $ 0.40