P13-3A Perform ratio analysis, and discuss change in financial position and operating results Condensed balance sheet and income statement data for Jergan Corporation are presented here. JERGAN CORPORATION Balance Sheet December 31 2019 2018 2017 Cash $30,000 $20,000 $18,000 Accounts receivable (net) 50,000 45,000 48,000 Other current assets 90,000 95,000 64,000 Investments 55,000 70,000 45,000 Plant and equipment (net) 500,000 370,000 358,000 $725,000 $600,000 $533,000 Current liabilities Long-term debt Common stock, $10 par Retained Earnings $85,000 145,000 320,000 175,000 $725,000 $80,000 85,000 310,000 125,000 $600,000 $70,000 50,000 300,000 113,000 $533,000 JERGAN CORPORATION Income Statement For the Year Ended December 31 2019 Sales revenue $740,000 Less: Sales return and allowances 40,000 Net sales 700,000 Cost of goods sold 425,000 Gross profit 275,000 Operating expenses (including income taxes) 180,000 Net income 95,000 2018 $600,000 30,000 570,000 350,000 220,000 150,000 70,000 Additional information: 1. The market price of Jergan's common stock was $7.00, $7.50, and $8.50 for 2017, 2018, and 2019, respectively. 2. You must compute dividends paid. All dividends were paid in cash. Instructions (a) Compute the following ratios for 2018 and 2019. (1) Profit margin. 5. Price-earnings ratio. (2) Gross profit rate. 6. Payout ratio. (3) Asset turnover. 7. Debt to assets ratio. (4) Earnings per share. (b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results from 2018 to 2019 of Jergan Corporation. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". 2018 Value Value ? 2018 Value Value ? 2018 Value Value ? 2018 (a)(2) Gross profit rate 2019 Gross profiel Value Net sales Value Gross profil (a)(3) Asset turnover 2019 Total assets Value Total asset Value Total assets, 2017 ? Average to 2019 Net sales Value Average to Value Asset turno (a)(4) Earnings per share 2019 Commonsi Value Commons Value Common shares outstanding, Average coll 2019 Net incomel Value Average coll Value Earnings pe (a)(5) Price earnings ratio 2019 Stock price Value Earnings pe! Value Price-earnir (a)(6) Payout ratio 2019 Prior year's Value Plus: currer! Value Less: currer Value Cash divide! ? 2019 Cash dividel Value Net income Value Payout ratid (a)(7) Debt to assets ratio 2019 Current Lial Value Long-term Value Total liabilis Total assets! Value Debt to ass Value Value ? 2018 Value Value ? 7 2018 Value Value ? ? 2018 Value Value Value ? 2018 Value Value ? ? 2018 Value Value ? Value