Ratio Analysis The following data are taken from the records of John Spencer Corporation.

Required:
1. Compute the following ratios for 2008 and 2009:

a. Current ratio

b. Debt ratio

c. Asset turnover

d. Return on sales

e. Return on equity 2. Have the firm’s performance and financial position improved from 2008 to 2009? Explain.

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Assets: John Spencer Corporation Comparative Balance Sheet December 31 2009 2008 Cash Accounts receivable Inventory $ 4,000 $ 6,000 16,000 14,000 40,000 20,000 Property, plant, and equipment Other assets Total assets Liabilities and stockholders' equity: Current liabilities Long-term liabilities Paid-in capital 100,000 100,000 16,000 20,000 $176,000 $160,000 44,000 $ 50,000 24,000 10,000 60,000 60,000 Retained earnings 48,000 40,000 Total liabilities and stockholders' equity $176,000 $160,000