Learning objective 4 P17-27A Using ratios to evaluate a stock investmene Comparative financial statement data of Sanfield, Inc. follo , 2018. o 48.916 SANFIELD, INC. Comparative Income Statement Years Ended December 31, 2018 and 2017 SANFIELD Balance Sheet December 31, 2018 and 2017 2017 %462,000 Assets %430,000 236,000 213,000 226,000 217,000 135,000 133,000 91,000 84,000 8,000 12,000 Income Before Income Tax 83,000 72,000 18,000 22,000 s 65,000 5 50,000 Current Assets: 000 $92,000 Gross Profit Operating Expenses Income from Operations Interest Expense 09,000117,000 5 100,000 142,000164,000 207.000 Accounts Receisable, Net Merchandise Inventory Prepaid Expenses Total Current Assets 5,000 15,000 365.000383,000 215.000 177,000 580,000 $60.000 599.000 Property, Plant, and Equipment, Net Income Tax Expense Net Income Liabilities 222,000$244000 Total Current Liabilities Long-term Liabilities Total Liabilities 113,000 92,000 35,00036,000 Stockholders Equity Preferred Stock, 4% Common Stockholders' Equity, no par 2,0002,000 153,000 132,000 000 85,000 Total Liabilities and Stockholders' Equity 580,000 5560,000 . Selected 2016 amounts 1. Market price of Sanficld's common stock: $51.48 at December 31, 2018, and $37.08 at December 31, 2017 2. Common shares outstanding: 16,000 on December 31,2018 and 15,000 on Decem- ber 31, 2017 and 2016 3. All sales are on credit. Requirements 1. Compute the following ratios for 2018 and 2017 f. Debt to equity ratio g Rate of return on common a. Current ratio b. Cash ratio c. Times-interest-earned ratio d. Inventory turnover e. Gross profit percentage stockholders' equity h. Earnings per share of common stock i. Price/earnings ratio 2. Decide (a) whcther Sanfield's ability to pay debs and to sell inventory improved or deteriorated during 2018 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased