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 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 $24787.00 7. Other expenses 1,200.00 500.00 3 Income before income taxes $55,712,00 $24,287.00 9 Income tax expens 18,250.00 285.00 Net income $85,462.00 12,000.00 Na Pali Coast Company Comparative Balance Sheet December 31, 20-2 and 20-1 1 20-2 20-1 2 Assets 3 Current assets: 2 Cash 58,600.00 $7,500.00 5 Government notes 3,000.00 2,000.00 Accounts receivable (net) 10,500.00 8,600.00 53,600.00 Merchandise inventory 33,200.00 7 3,200.00 Supplies and prepayments 4,500.00 580,200.00 $54,500.00 Total current assets 10 Property, plant and equipment: $40,000.00 $40,000.00 Land 200,000.00 150.000.00 12 Building (net) 13,000.00 15.000.00 Delivery equipment (net) 5,40000 6.000.00 Office equipment (net) 5.000.00 6,000.00 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 Liabilities 19 Current liabilities: Notes payable $5,000.00 $3,000.00 21 Accounts payable 28.700.00 22,300.00 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: 28 Bonds payable 50,000.00 20,000.00 Total liabilities $88.400.00 $52,600.00 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 eamings 75,200.00 158,900.00 31 Retained eamings 75,200.00 58,900.00 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) 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 Pal/ Coast Company's common stock was $23.00 on December 31, 20-2.) (b) Book value per share of common stock Horizontal Analysis 1. Perform horizontal analysis of the comparative income statement and balance sheet Round percentages to one decimal. Na Pali Coast Company 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 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 $24787.00 7. Other expenses 1,200.00 500.00 3 Income before income taxes $55,712,00 $24,287.00 9 Income tax expens 18,250.00 285.00 Net income $85,462.00 12,000.00 Na Pali Coast Company Comparative Balance Sheet December 31, 20-2 and 20-1 1 20-2 20-1 2 Assets 3 Current assets: 2 Cash 58,600.00 $7,500.00 5 Government notes 3,000.00 2,000.00 Accounts receivable (net) 10,500.00 8,600.00 53,600.00 Merchandise inventory 33,200.00 7 3,200.00 Supplies and prepayments 4,500.00 580,200.00 $54,500.00 Total current assets 10 Property, plant and equipment: $40,000.00 $40,000.00 Land 200,000.00 150.000.00 12 Building (net) 13,000.00 15.000.00 Delivery equipment (net) 5,40000 6.000.00 Office equipment (net) 5.000.00 6,000.00 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 Liabilities 19 Current liabilities: Notes payable $5,000.00 $3,000.00 21 Accounts payable 28.700.00 22,300.00 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: 28 Bonds payable 50,000.00 20,000.00 Total liabilities $88.400.00 $52,600.00 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 eamings 75,200.00 158,900.00 31 Retained eamings 75,200.00 58,900.00 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) 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 Pal/ Coast Company's common stock was $23.00 on December 31, 20-2.) (b) Book value per share of common stock Horizontal Analysis 1. Perform horizontal analysis of the comparative income statement and balance sheet Round percentages to one decimal. Na Pali Coast Company