Jeffersonian Corporation has been in business for over 50 years. The company is looking to expand operations into the Pacific Rim and would like an analysis of its financial statements to be prepared. Review the financial statements below: Jeffersonian Corporation

Comparative Income Statement

For years ended December 31, 2014 and 2015

2015 2014

Sales $ 2,486,000.00 $ 2,075,000.00

Cost of goods sold $ 1,523,000.00 $ 1,222,000.00

Gross Profit $ 963,000.00 $ 853,000.00

Operating Expenses

Salaries Expense $ 145,000.00 $100,000.00

Contract Labor Expense $ 240,000.00 $ 280,000.00

Insurance Expense $165,000.00 $200,000.00

Supplies expense $100,000.00 $ 45,000.00

Depreciation Expense $ 26,000.00 $35,000.00

Miscellaneous expense $ 85,000.00 $ 75,000.00

Marketing and Promotion expense $17,000.00 $15,000.00

Total operating expenses $ 778,000.00 $ 750,000.00

Operating Income $ 185,000.00 $ 103,000.00

Interest expense $ 44,000.00 $ 46,000.00

Income before taxes $141,000.00 $ 57,000.00

Income taxes $ 47,000.00 $ 19,000.00

Net Income $ 94,000.00 $ 38,000.00

Jeffersonian Corporation

Comparative Balance Sheet

For years ended December 31, 2015 and 2014

2015 2014

Assets

Current Assets

Cash $ 79,000.00 $ 42,000.00

Marketable Securities $ 65,000.00 $ 96,000.00

Accounts receivable $ 120,000.00 $100,000.00

Merchandise Inventory $ 250,000.00 $ 265,000.00

Total current assets $514,000.00 $ 503,000.00

Fixed Assets

Store Equipment, net $ 400,000.00 $ 350,000.00

Office Equipment, net $ 45,000.00 $ 50,000.00

Building, net $ 625,000.00 $ 675,000.00

Land $ 100,000.00 $ 100,000.00

Total fixed assets $ 1,170,000.00 $ 1,175,000.00

Total assets $ 1,684,000.00 $ 1,678,000.00

Liabilities

Current Liabilities

Accounts payable $164,000.00 $ 190,000.00

Short term Liabilities $ 75,000.00 $ 90,000.00

Taxes payable $ 26,000.00 $ 12,000.00

Total current liabilities $ 265,000.00 $ 292,000.00

Long?term liabilities

Mortgage payable $ 400,000.00 $ 420,000.00

Total liabilities $ 665,000.00 $ 712,000.00

Stockholder's Equity

Common Stock, $5 par value $ 475,000.00 $ 475,000.00

Retained earnings $ 544,000.00 $ 491,000.00

Total stockholder's equity $1,019,000.00 $ 966,000.00

Total $ 1,684,000.00 $ 1,678,000.00

REQUIRED:

1. Prepare comparative income statements for year 2015 in comparison to year 2014.

2. Prepare common-size comparative balance sheet for years 2015 and 2014

3. Compute the following ratios for 2015.

? Current ratio

? Profit margin ratio

? Acid-test ratio

o Total asset turnover

? Accounts receivable turnover

? Return on total assets ?

Days sales uncollected

o Earnings per share

? Inventory turnover

o Price earnings ratio

? Debt-to-equity ratio

o Dividend yield

? Times interest earned