accounting

Ohara Company Income Statement For the Year Ended December 31, 2025

Net sales $2,218,500

Cost of goods sold 1,012,400

Selling and administrative expenses 906,000

Interest expense 78,000

Income tax expense 69,000

Net income $153,100

Ohara Company Balance Sheet December 31, 2025

Assets

Current assets

Cash $60,100

Debt investments 84,000

Accounts receivable (net) 169,800

Inventory 145,000

Total current assets 458,900

Plant assets (net) 575,300

Total assets $1,034,200

Liabilities and Stockholders Equity

Current liabilities

Accounts payable $ 160,000

Income taxes payable 35,500

Total current liabilities 195,500

Bonds payable 200,000

Total liabilities 395,500

Stockholders equity

Common stock 350,000

Retained earnings 288,700

Total stockholders equity 638,700

Total liabilities and stockholders equity $1,034,200

Additional information: The weighted-average common shares outstanding during the year was 50,000. Instructions

Compute the following values and ratios for 2025. (We provide the results from 2024 for comparative purposes.)

Working capital. (2024: $160,500) Current ratio. (2024: 1.65:1) Debt to assets ratio. (2024: 31%) Earnings per share. (2024: $3.15)

Using your calculations from part (a), discuss changes from 2024 in liquidity, solvency, and profitability.

Compute and interpret liquidity, solvency, and profitability ratios.