Part C: Ratio Calculations 1. Assume Luxio has 1000 shares of common stock outstanding, and the market price of the shares at the end of 2009 was $45. Also assume that the share price and number of outstanding shares does not change. 2. Using the exact formulas found in the textbook, compute all the ratios listed in Appendix A for 2008, 2009, and 2010 (write n/a where you don't have enough information for a specific year). Place all your answers in the format found in Appendix A. 3. Based entirely on your ratio analysis explain in detail the strengths and weaknesses of the company to a potential common equity investor. Summarize by making recommendations to the firm. Ratio Calculations and Analysis Appendix A: Short-term solvency ratios Current ratio Quick ratio Cash ratio Asset utilization ratios Total asset turnover Inventory turnover Receivables turnover Long-Term solvency ratios - Debt-equity ratios Times interest earned ratio Cash coverage ratio Profitability ratios Profit margin Return on assets Return on equity Market value ratios Price-earnings ratio Dividends per share Market to book ratio $ $ LUXIO GOLF CORP. 2009 Income Statement Sales Cost of Goods Sold Depreciation Earnings Before Interest & Tax Interest Paid Taxable income Taxes (35%) Net Income Dividends $ 18,000.00 Addition to Retained Earnings 13,721.95 285,760.00 205,132.00 21,950.00 58,678.00 9,875.00 48,803.00 17,081.05 31,721.95 $ $ Balance Sheet LUXIO GOLF CORP. 2009 Balance Sheets Assets 2008 Liabilities & Owner's Equity 2009 2008 2009 Current Assets Current Liabilities S $ $ s Cash Accounts Receivable Inventory Total Assets 18,270.00 12,315.00 21,584.00 52,169.00 22,150.00 13,865.00 24,876.00 60,891.00 Accounts Payable Notes Payable Other Total Long-term Debt 16,215.00 8,000.00 11,145.00 35,360.00 80,000.00 17,318.00 10,000.00 14,451.00 41,769.00 85,000.00 $ $ s s S S Fixed Assets Net Plant & Equipments 168,326.00 $ 184,735.00 s $ Owner's Equity Common Stock & paid in Retained Earnings Total 20,000.00 85,135.00 105,135.00 20,000.00 98.857.00 118,857.00 s S Total Assets $ 220,495.00 $ 245,626.00 Total Liabilities & Owner's $ 220,495.00 $ 245,626.00