Financial information for Bradford Company is presented here.

Cash	$50,000	$42,000
Debt investments (short-term)	80,000	50,000
Accounts receivable	100,000	77,000
Inventory	410,000	320,000
Prepaid expenses	30,000	31,000
Land	75,000	75,000
Building and equipment (net)	570,000	400,000
Total assets	$1,315,000	$995,000
Liabilities and Stockholders' Equity
Notes payable	$120,000	$25,000
Accounts payable	160,000	90,000
Accrued liabilities	50,000	50,000
Bonds payable, due 2014	180,000	100,000
Common stock, $5 par	500,000	500,000
Retained earnings	305,000	230,000
Total liabilities and stockholders' equity	$1,315,000	$995,000

Sales revenue	$1,050,000	$940,000
Cost of goods sold	680,000	635,000
Gross profit	370,000	305,000
Operating expenses	240,000	215,000
Net income	$130,000	$90,000

Additional information:

1.	Inventory at the beginning of 2013 was $330,000.
2.	Accounts receivable at the beginning of 2013 were $80,000.
3.	Total assets at the beginning of 2013 were $1,175,000.
4.	No common stock transactions occurred during 2013 or 2014.
5.	All sales were on account.

Instructions

1.	Indicate, by using ratios, the change in liquidity and profitability of the company from 2013 to 2014. (Note:Not all profitability ratios can be computed nor can cash-basis ratios be computed.)

2.

Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2014, and (2) as of December 31, 2015, after giving effect to the situation. Net income for 2015 was $135,000. Total assets on December 31, 2015, were $1,350,000.

1. 10,000 shares of common stock were sold at par on July1, 2015.	Return on common stockholders' equity
2. All of the notes payable were paid in 2015.	Debt to assets ratio
3. The market price of common stock on December 31, 2014, was $15. The market price on December 31, 2015, was $18.	Price-earnings ratio

Where do I start?