P18-4A Comparative financial statement data of Swanner Resources, Inc., follow. SWANNER RESOURCES, INC. Comparative Income Statement Years Ended December 31, 20X4 and 20X3 20X4 20X3 Net sales........ $462,000 $427,000 Cost of goods sold. 289,000 278,000 Gross profit 173,000 149,000. Operating expenses.. 81.000 78,000 Income from operations. 92.000 71,000 Interest expense... 11,000 12,000 Income before income tax 81.000 59.000 Income tax expense. 30.000 27.000 Net income..... 51,000 $ 32.000 SWANNER RESOURCES, INC. Comparative Balance Sheet December 31, 20X4 and 20X3 (selected 20X2 amounts given for computation of ratios) 20X4 20X3 20X2 Current assets: Cash $116,000 $ 97,000 Current receivables, net. 112,000 116,000 $103,000 Inventories 104.000 122.000 101,000 Prepaid expenses.. 64.000 47.000 Total current assets. 396.000 382,000 Property, plant, and equipment, net 189,000 178.000 Total assets. $585,000 $560.000 598.000 Total current liabilities. $206,000 $223,000 Long-term liabilities. 119,000 117,000 Total liabilities.. 325,000 340.000 Preferred stockholders' equity, 6%. $100 par 100,000 100.000 Common stockholders' equity, no par. 160,000 120,000 90.000 $585.000 $560,000 Total liabilities and stockholders' equity.. Other information:

a. Market price of Swanner's common stock: $53 at December 31, 20X4, and $31.50 at December 31, 20X3.

b. Common shares outstanding: 10.000 during 20X4 and 9.000 during 20X3. Required 1. Compute the following ratios for 20X4 and 20X3:

a. Current ratio

b. Inventory turnover

c. Accounts receivable turnover

d. Times-interest-earned ratio

e. Return on assets

f. Return on common stockholders' equity g. Earnings per share of common stock 2. Decide

(a) whether Swanner's financial position improved or deteriorated during 20X4. and

(b) whether the investment attractiveness of its common stock appears to have increased or decreased. 3. How will what you learned in this problem help you evaluate an investment?