I.Answer the following questions based from the data given:

1.What is the percentage of gross profit over its sales?

2.How many percent is the increase in sale?

3.In the income statement how much is the increase/decrease in expense?

4.Given the fact that the Net Income is the same in the current year with the previous year, did the company perform well? Why?

5.How many percent is the increase or decrease in the Fixed assets?

6.How many percent is the total assets is financed thru a liability?

7.How many percent is the total assets is financed by the owners?

8.Financial ratio analysis is conducted by three main groups of analysts: credit analysts, stock analysts and managers. What do you think is the primary emphasis of each group?

9.What does the ratio expression "turnover" mean? Why would inventory turnover ratio be more important for someone analyzing a grocery store chain than an insurance company?

10.If you are the owner of a financial institution or creditor, would you lend money to finance the Anetek Chemical Corporation? Explain.

Illustration 1: Income Statement Anetek Chemical Corporation INCOME STATEMENT For the Year Ended December 31 (000 Omitted) 2007 2006 Sales and other revenue Net sales $1,600,000 $1,350,000 Interest revenue 25,000 20,000 Other revenue 50,000 30,000 Total revenue 1,675,000 1,400,000 Cost and other charges Cost of goods sold 1,000,000 850,000 Depreciation and amortization 150,000 150,000 Selling and administrative expenses 225,000 150,000 Interest expense 50,000 25,000 Total 1,425,000 1,175,000 Income before taxes 250,000 225,000 Income taxes 100,000 75,000 Net income $150,000 $150,000 Earnings per share $5.00 $5.00 "Additional information: Number of shares outstanding in 2006 and 2007 is 30 million shares. Market price of Aneteks stock at end of 2007 is $60. Cash dividend per share in 2007 is $2.25. Correction of error in prior period $4.5 million. Net Cash provided by operating activities in 2007 is $350,000.Anetek Chemical Corporation CONSOLIDATED BALANCE SHEET* December 31 (000 omitted) Assets 2007 2006 Current assets Cash $ 40,000 $ 25,000 Marketable securities 100,000 75,000 Accounts receivable 350,000 300,000 Inventories (at lower of cost or market) 310,000 250,000 Total current assets 800,000 650,000 Investments ( at fair value) 300,000 325,000 Fixed assets Property, plant, and equipment (at cost) 2,000,000 1,900,000 Less-accumulated depreciation (900,000) (800,000) 1,100,000 1,100,000 Goodwill 50,000 25,000 Total assets $2,250,000 $2.100,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 125,000 $ 100,000 Notes payable 250,000 200,000 Accrued and other liabilities 200,000 150,000 Total current liabilities 575,000 450,000 Long-term debt Bonds and notes payable 725,000 782 500 Total liabilities 1,300,000 1,232,500 Stockholders equity Common stock, $5 par 150,000 150,000 Additional paid-in capital 550,000 550,000 Retained earnings 250,000 167,500 Total equity 950,000 867,500 Total debt and equity $2,250,000 $2,100,000 The notes and some detail that accompanied this statement are excluded for purposes of simplicity and brevity