The condensed balance sheet and income statement data for Finch Corporation are presented below.

Additional information:
1. The market price of Finch common stock was $5.00, $3.50, and $2.80 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 Finch Corporation.

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FINCH CORPORATION Balance Sheets December 31 2012 2011 2010 Cash Receivables (net) Other current assets Investments $ 30,000 $ 24,000 $ 20,000 110,000 48,000 48,000 80,000 78,000 62,000 90,000 70,000 50,000 Plant and equipment (net) 503,000 400,000 360,000 $813,000 $620,000 $540,000 Current liabilities $ 98,000 $ 75,000 $ 70,000 Long-term debt 130,000 75,000 Common stock, $10 par 400,000 340,000 65,000 300,000 Retained earnings 185,000 130,000 105,000 $813,000 $620,000 $540,000