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Condensed balance sheet and income statement data for Ayayai Corporation are presented here. AYAYAI CORPORATION Balance Sheets December 31 2017 2016 2015 Cash $ 31,000

Condensed balance sheet and income statement data for Ayayai Corporation are presented here.

AYAYAI CORPORATION Balance Sheets December 31

2017

2016

2015

Cash

$ 31,000

$ 21,000

$ 19,000

Accounts receivable (net)

51,000

46,000

49,000

Other current assets

92,000

97,000

66,000

Investments

57,000

72,000

47,000

Plant and equipment (net)

500,000

370,000

358,000

$731,000

$606,000

$539,000

Current liabilities

$ 86,000

$ 81,000

$ 71,000

Long-term debt

147,000

87,000

52,000

Common stock, $10 par

322,000

312,000

302,000

Retained earnings

176,000

126,000

114,000

$731,000

$606,000

$539,000

AYAYAI CORPORATION Income Statements For the Years Ended December 31

2017

2016

Sales revenue

$742,000

$602,000

Less: Sales returns and allowances

41,000

31,000

Net sales

701,000

571,000

Cost of goods sold

427,000

352,000

Gross profit

274,000

219,000

Operating expenses (including income taxes)

181,000

151,000

Net income

$ 93,000

$ 68,000

Additional information:

1. The market price of Ayayais common stock was $7.00, $7.50, and $8.50 for 2015, 2016, and 2017, respectively.
2. You must compute dividends paid. All dividends were paid in cash.

(a) Compute the following ratios for 2016 and 2017.

2017

2016

Profit margin

%

%
Gross profit rate

%

%
Asset turnover

times

times
Earnings per share

$

$

Price-earnings ratio

times

times
Payout ratio

%

%
Debt to assets ratio

%

%

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