Comparative financial statements for Na Pali Coast Company for the years ending December 31, 20-1 and 20-2 are provided.

Na Pali Coast Company

Comparative Income Statement

For Years Ended December 31, 20-2 and 20-1

1		20-2	20-1
2	Net sales	$466,451.00	$291,613.00
3	Cost of goods sold	285,889.00	188,626.00
4	Gross profit	$180,562.00	$102,987.00
5	Operating expenses	125,650.00	78,200.00
6	Operating income	$54,912.00	$24,787.00
7	Other expenses	1,200.00	500.00
8	Income before income taxes	$53,712.00	$24,287.00
9	Income tax expense	18,250.00	7,285.00
10	Net income	$35,462.00	$17,002.00

Na Pali Coast Company

Comparative Balance Sheet

December 31, 20-2 and 20-1

1		20-2	20-1
2	Assets
3	Current assets:
4	Cash	$8,600.00	$7,500.00
5	Government notes	3,000.00	2,000.00
6	Accounts receivable (net)	10,500.00	8,600.00
7	Merchandise inventory	53,600.00	33,200.00
8	Supplies and prepayments	4,500.00	3,200.00
9	Total current assets	$80,200.00	$54,500.00
10	Property, plant, and equipment:
11	Land	$40,000.00	$40,000.00
12	Building (net)	200,000.00	150,000.00
13	Delivery equipment (net)	13,000.00	15,000.00
14	Office equipment (net)	5,400.00	6,000.00
15	Patents	5,000.00	6,000.00
16	Total property, plant, and equipment	$263,400.00	$217,000.00
17	Total assets	$343,600.00	$271,500.00
18	Liabilities
19	Current liabilities:
20	Notes payable	$5,000.00	$3,000.00
21	Accounts payable	28,700.00	22,300.00
22	Accrued and withheld payroll taxes	4,200.00	5,600.00
23	Accrued interest payable	500.00	1,700.00
24	Total current liabilities	$38,400.00	$32,600.00
25	Long-term liabilities:
26	Bonds payable	50,000.00	20,000.00
27	Total liabilities	$88,400.00	$52,600.00
28	Stockholders Equity
29	Common stock ($5 par)	$115,000.00	$100,000.00
30	Paid-in capital in excess of par	65,000.00	60,000.00
31	Retained earnings	75,200.00	58,900.00
32	Total stockholders equity	$255,200.00	$218,900.00
33	Total liabilities and stockholders equity	$343,600.00	$271,500.00

	Required:
1.	Perform horizontal analysis of the comparative income statement and balance sheet.
2.	Perform vertical analysis of the comparative income statement and balance sheet.
3.	Compute the following liquidity measures for 20-2:
(a)	Working capital
(b)	Current ratio
(c)	Quick or acid-test ratio
4.	Compute the following activity measures for 20-2:
(a)	Accounts receivable turnover and average number of days to collect receivables (Assume that sales on account for 20-2 were $120,000.)
(b)	Merchandise inventory turnover and average number of days to sell inventory
(c)	Asset turnover
5.	Compute the following profitability measures for 20-2:
(a)	Profit margin ratio
(b)	Return on assets
(c)	Return on common stockholders equity
(d)	Earnings per share of common stock
6.	Compute the following leverage measures for 20-2:
(a)	Debt-to-equity ratio
(b)	Times interest earned ratio (Assume interest expense for 20-2 was $1,200.)
7.	Compute the following market measures for 20-2:
(a)	Price-earnings ratio (The market price of Na Pali Coast Companys common stock was $23.00 on December 31, 20-2.)
(b)	Book value per share of common stock