DOBSON COMPANY

Comparative Balance Sheet

December 31

Assets2009 2008

Cash............................................................ $35,000 40,000

Short-term investments.....................................15,000 60,000

Accounts receivable(net).................................50,000 30,000

Inventory...................................................50,000 70,000

Property, plant and equipment (net)....................250,000 250,000

Total assets....................................... $400,000 $500,000

Liabilities and stockholders' equity

Accounts payable.......................................$10,000 $30,000

Short-term notes payable.............................40,000 90,000

Bonds payable.........................................88,000 160,000

Common stock.........................................160,000 145,000

Retained earings.......................................102,000 75,000

Total liabilities and stockholders' equity$400,000 $500,000

DOBSON COMPANY

Income Statement

For year ended December 31, 2009

Net sales..........................................................$360,000

Cost of goods sold...............................................198,000

Gross profit.......................................................162,000

Expenses

Interest expense.........................................$12,000

Selling expenses........................................40,000

Administrative expenses...........................59,000

Total expenses.............................111,000

Income before income taxes...............................51,000

Income tax expense........................................ 15,000

Net income.................................................. $36,000

Additional information:

a.Cash dividends of $9,000 were declared and paid in 2009.

b.Weighted-average number of shares of common stock outstanding during 2009 was 30,000

c.Market value of common stock on December 31, 2009 was $21 per share.

Instructions

Using the financial statements and additional information, compute the following rations for Dobson Company for 2009. Show all computations.

Computations

1.Current ratio_______________

2.Return on common stockholders' equity_________

3.Price-earnings ratio____________

4.Acid-test ratio__________________

5.Receivables turnover______________

6.Times interest earned_____________

7.Profit margin___________________

8.Days in inventory_______________

9.Payout ratio_____________________

10.Return on assets__________