Condensed balance sheet and income statement data for Glassgow Corporation are presented here.

Additional information:
1. The market price of Glassgow’s common stock was $7.00, $7.50, and $8.50 for 2010, 2011, and 2012, respectively.
2. You must compute dividends paid. All dividends were paid in cash.
Instructions

(a) Compute the following ratios for 2011 and 2012.
(1) Profit margin. (5) Price-earnings.
(2) Gross profit rate. (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 in the financial position and operating results from 2011 to 2012 of Glassgow Corporation.

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GLASSGOW CORPORATION Balance Sheets December 31 2012 2011 2010 Cash $ 30,000 $ 20,000 $ 18,000 Receivables (net) Investments 50,000 45,000 48,000 Other current assets 90,000 95,000 64,000 55,000 70,000 45,000 Plant and equipment (net) 500,000 370,000 358,000 $725,000 $600,000 $533,000 Current liabilities $ 85,000 $ 80,000 Long-term debt 145,000 85,000 $ 70,000 50,000 Common stock, $10 par 320,000 310,000 300,000 Retained earnings 175,000 125,000 113,000 $725,000 $600,000 $533,000