page 736/15 and on page 737 instructions that belong to that exercise too.

736 Chapter 15 Financial Statement Analysis Instructions (a) Prepare a vertical analysis of the 2009 income statement data for Logsdon Company and Waitlin Company in columnar form. (b) Comment on the relative profitability of the companies by computing the return on assets and the return on common stockholders' equity ratios for both companies. Compute ratios from balance sheet and income statement. (SO 5 ) P15-2 The comparative statements of Villa Tool Company are presented below. VILLA TOOL COMPANY Income Statement For the Year Ended December 31 VILLA TOOL COMPANY Balance Sheets December 31 All sales were on account. The allowance for doubtful accounts was $3,200 on December 31 , 2009 , and $3,000 on December 31, 2008 . Problems 737 Compute the following ratios for 2009. (Weighted-average-common shares in 2009 were 57,000 .) (a) Earnings per share. (b) Return on common stockholders' equity. (c) Return on assets. (d) Current. (f) Receivables turnover. (g) Inventory turnover. (h) Times interest earned. (e) Acid-test. (i) Asset turnover. (j) Debt to total assets. P15-3 Financial information for Hanshew Company is presented below. HANSHEW COMPANY Compute ratios, and comment on overall liquidity and profitability. Balance Sheets (SO 5) HANSHEW COMPANY Income Statement For the Years Ended December 31 Additional information: 1. Inventory at the beginning of 2008 was $118,000. 2. Receivables (net) at the beginning of 2008 were $88,000. The allowance for doubtful accounts was $4,000 at the end of 2009,$3,800 at the end of 2008 , and $3,700 at the beginning of 2008 . 3. Total assets at the beginning of 2008 were $630,000. 4. No common stock transactions occurred during 2008 or 2009. 5. All sales were on account. Instructions (a) Indicate, by using ratios, the change in liquidity and profitability of Hanshew Company from 2008 to 2009. (Note: Not all profitability ratios can be computed.) 736 Chapter 15 Financial Statement Analysis Instructions (a) Prepare a vertical analysis of the 2009 income statement data for Logsdon Company and Waitlin Company in columnar form. (b) Comment on the relative profitability of the companies by computing the return on assets and the return on common stockholders' equity ratios for both companies. Compute ratios from balance sheet and income statement. (SO 5 ) P15-2 The comparative statements of Villa Tool Company are presented below. VILLA TOOL COMPANY Income Statement For the Year Ended December 31 VILLA TOOL COMPANY Balance Sheets December 31 All sales were on account. The allowance for doubtful accounts was $3,200 on December 31 , 2009 , and $3,000 on December 31, 2008 . Problems 737 Compute the following ratios for 2009. (Weighted-average-common shares in 2009 were 57,000 .) (a) Earnings per share. (b) Return on common stockholders' equity. (c) Return on assets. (d) Current. (f) Receivables turnover. (g) Inventory turnover. (h) Times interest earned. (e) Acid-test. (i) Asset turnover. (j) Debt to total assets. P15-3 Financial information for Hanshew Company is presented below. HANSHEW COMPANY Compute ratios, and comment on overall liquidity and profitability. Balance Sheets (SO 5) HANSHEW COMPANY Income Statement For the Years Ended December 31 Additional information: 1. Inventory at the beginning of 2008 was $118,000. 2. Receivables (net) at the beginning of 2008 were $88,000. The allowance for doubtful accounts was $4,000 at the end of 2009,$3,800 at the end of 2008 , and $3,700 at the beginning of 2008 . 3. Total assets at the beginning of 2008 were $630,000. 4. No common stock transactions occurred during 2008 or 2009. 5. All sales were on account. Instructions (a) Indicate, by using ratios, the change in liquidity and profitability of Hanshew Company from 2008 to 2009. (Note: Not all profitability ratios can be computed.)