Comparative financial statements for Heritage Services for the fiscal year ending December 31 appear in the next couple pages. The company did not issue any new common or preferred shares during the year. A total of 600 common shares were outstanding. The interest rate on the bond payable is 14%, the income tax rate was 40% and the dividend per share for the common shares were $0.75. The market value of the common share at the end of the year was $26. All of the sales for the company are on account.

HERITAGE SERVICES

COMPARATIVE BALANCE SHEET

(dollars in thousand)

Asset:	This year	Last year
Current Asset:
Cash	$1,080	$ 1,210
Account receivable, net	9000	6500
Inventory	12,000	10,600
Prepaid Expenses	600	500
Total Current Asset	22,680	18,810
Property and Equipment:
Land	9,000	9,000
Building and Equipment	36,800	38,000
Total Property and equipment	45,800	47,000
Total Assets:	68,480	65,810
Liabilities and Shareholder Equity
Current Liability:
Accounts payable	$18,500	$17,400
Accrued Payable	900	700
Notes payable, short term	0	100
Total Current Liabilities	19,400	18,200
Long - Term liabilities:
Bond payable	8,000	8,000
Total Liabilities	27,400	26,200
Shareholders Equity:
Preferred shares	1,000	1,000
Common shares	2,000	2,000
Additional paid - up Capital	4,000	4,000
Total paid in capital	7,000	7,000
Retained Earning	34,080	32,610
Total shareholders Eqity	41,080	39,610
Total Liabilities and Shareholders Equity	$68,480	65,810

HERITAGE SERVICES

COMPARATIVE INCOME STATEMENT

(dollars in thousand)

	This year	Last year
Sales	$66,000	$64,000
Cost of Good sold	43,000	42,000
Gross Margin	23,000	22,000
Selling and Administrative Expenses:
Selling Expenses	11,500	11,000
Administrative Expenses	7,400	7,000
Total Selling and Administrative Expenses	18,900	18,000
Net operating income	4,100	4,000
Interest Expense	800	800
Net Income before taxes	3,300	3,200
Income Taxes	1,320	1,280
Net Income	1,980	1,920
Dividend paid to preferred shareholders	60	400
Net income remaining for common shareholders	1,920	1,520
Dividends paid to preferred shareholders	450	450
Net income added to retained earnings	1,470	1,070
Retained earning, beginning of year	32,610	31,540
Retained earning, end of year	$34,080	32,610

COMPUTE THE FOLLOWING

1. Gross Margin Percentage

2. Earnings per share for common shareholders

3. Price-earnings ratio.

4. Dividend payout ratio.

5. Dividend yield ratio.

6. Return on total assets.

7. Return on common stockholders' equity.

8. Book value per share.