P14-3 Perform ratio analysis and evaluate financial position and operating results
Condensed balance sheet and income statement data for Landwehr Corporation appear
below and on page 644.
	LANDWEHR CORPORATION
	Balance Sheets
	December 31
				2018		2017		2016
	Cash			25,000		20,000		18,000
	Accounts receivable (net)			50,000		45,000		48,000
	Other current assets			90,000		95,000		64,000
	Investments			75,000		70,000		45,000
	Plant and equipment (net)			400,000		370,000		358,000
				640,000		600,000		533,000
	Current liabilities			75,000		80,000		70,000
	Long-term debt			80,000		85,000		50,000
	Common stock, $10 par			340,000		310,000		300,000
	Retained earnings			145,000		125,000		113,000
				640,000		600,000		533,000
	LANDWEHR CORPORATION
	Income Statement
	For the Years Ended December 31
						2018		2017
	Sales revenue					$740,000		$700,000
	Less: Sales returns and allowances					40,000		50,000
	Net sales					700,000		650,000
	Cost of goods sold					420,000		400,000
	Gross profit					280,000		250,000
	Operating expenses (including income taxes)					235,000		220,000
	Net income					$45,000		$30,000
	Additional information:
	1. The market price of Landwehr's common stock was $4.00, $5.00, and $8.00 for
	2016, 2017 and 2018, respectively.
	2. All dividends are paid in cash.

After you have completed P14-3, consider the additional question.

1.

Assume that that the net income for 2017 and the weighted average common shares outstanding changed to $38,000 and 31,500 respectively.

Also assume that 2018 net sales and total liabilities also changed to $680,000 and $160,000 respectively. Show the impact of these changes on

the Profit Margin, Asset Turnover, Earnings Per share, price-earnings ratio, payout ratio, and debt to assets ratio for 2017 and 2018

(a)	Profit margin:						Profit margin:
	Net income		Value				Net income		Value
	Net sales		Value				Net sales		Value
	Asset turnover:						Asset turnover:
	Net sales		Value				Net sales		Value
	Average total assets		Value				Average total assets		Value
	Earnings per share:						Earnings per share:
	Net income - Pfd. Dividends		Value				Net income - Pfd. Dividends		Value
	Weighted average common shares outstanding		Value				Weighted average common shares outstanding		Value
	Price-earnings ratio:						Price-earnings ratio:
	Market price per share		Value				Market price per share		Value
	Earnings per share		Value				Earnings per share		Value
	Payout ratio:						Payout ratio:
	Cash dividends declared on common		Value				Cash dividends declared on common		Value
	Net income		Value				Net income		Value
	Debt to assets ratio:						Debt to assets ratio:
	Total liabilities		Value				Total liabilities		Value
	Total assets		Value				Total assets		Value