Problem: The condensed balance sheet and income statement for Petronila Company are presented below.

Petronila Company Balance Sheet At December 31, 2019

Assets Cash $ 19,000 Short-term investments 35,000 Accounts receivable (net) 48,400 Merchandise inventory 70,600 Property, plant, and equipment (net) 250,000 Intangible assets 12,400 Total Assets $435,400 Liabilities Current liabilities $108,400 11% Bonds payable, long term 100,000 Total Liabilities $208,400 Stockholders Equity Common Stocks, $1 par value $ 70,000 Retained earnings 157,000 Total stockholders equity $227,000 Total liabilities and stockholders equity $435,400

Petronila Company Income Statement

For the Year ended December 31, 2019

Net Sales $704,000 Cost of goods sold 422,400 Gross profit $281,600 Operating expenses 166,200 Income before interest expense and income tax $115,400 Interest expense 11,000 Income before income taxes $104,400

Income taxes 31,320 Net income $ 73,080 Earnings per share $1.04 Dividends per common share $.50 Market price per share $15.50 Required: 40 points Use the formulas presented in Exhibit 17-16, page 737, to make a ratio analysis of Petronila Company at December 31, 2019. Prepare a Ratio Analysis Schedule including Liquidity and Efficiency, Solvency, Profitability, and Market Prospects formulas, use the model presented below:

RATIO ANALYSIS SCHEDULE RATIOS* FORMULA RESULTS EXPLANATIONS

*NOTE: Eliminated the word average from formulas, the company dont have preferred dividends, number of common shares outstanding at December 31, 2019, were 70,000.