Question 2: The condensed financial statements of CHRISTENSEN, INC. for the years 2011

and 2012 are presented below.

CHRISTENSEN, INC.

Balance Sheets December 31

	2012	2011
Current assets
Cash and cash equivalents	$330	$360
Accounts receivable (net)	470	400
Inventories	460	380
Prepaid expenses	130	160
Total current assets	1,390	1,300
Property, plant, and equipment	420	380
Investments	10	10
Intangibles and other assets	530	510
Total assets	$2,350	$2,200
Current liabilities	$890	$790
Long-term liabilities	410	380
Stockholders equitycommon	1,050	1,030
Total liabilities and stockholders equity	$2,350	$2,200

CHRISTENSEN, INC.

Income Statements

For the Years Ended December 31

	2012	2011
Revenues	$3,800	$3,460
Costs and expenses
Cost of goods sold	970	890
Gross profit	$2,830	$2,570
Selling & administrative expenses	2,400	2,330
Income before inter	$430	$240
Interest expense	10	20
Income before income taxes	420	220
Income tax expense	147	77
Net income	273	143

Compute the following ratios for 2011 and 2012.

1. Return on assets. (Assets on 12/31/09 were $1,900.)
2. Return on common stockholders equity. (Stockholders equitycommon on 12/31/09 was $900.)
3. Debt to total assets ratio.
4. Times interest earned.