Requirement 2

Based on the financial statements provided and assuming the market price of Drapers stock is $200 per share and there are 100 shares of common stock outstanding, calculate the following ratios for the year ended December 31, 2012. Round all amounts to TWO places past the decimal point. Show your calculations in the boxes provided.

Current Ratio

Debt Ratio

Debt to Equity Ratio

Earnings per Share

Price to Earnings Ratio

Rate of Return on Total Assets*

Rate of Return on Common Stockholders Equity*

*Note: Use the current year amounts instead of averages for calculations.

Draper Consulting Inc.
Balance Sheet
December 31, 2013 and 2012
	2013	2012
Assets:
Current Assets:
Cash	514,936	16,350
Accounts Receivable	37,500	1,750
Supplies	2,200	200
Total Current Assets	554,636	18,300
Plant Assets:
Equipment	16,000	1,800
Less: Accumulated Depreciation - Equipment	(440)	(30)
Furniture	5,700	4,200
Less: Accumulated Depreciation - Furniture	(661)	(70)
Building	125,000	0
Less: Accumulated Depreciation - Building	(1,652)	0
Total Assets	698,583	24,200
Liabilities:
Current Liabilities:
Accounts Payable	10,000	4,650
Salary Payable	4,100	685
Unearned Service Revenue	0	700
Total Current Liabilities	14,100	6,035
Long-Term Liabilities:
Interest Payable	10,667	0
Notes Payable	40,000	0
Bonds Payable	400,000	0
Less: Discount on Bonds Payable	(36,184)	0
Total Liabilities	428,583	6,035
Stockholders' Equity:
Common Stock	130,000	18,000
Retained Earnings	140,000	165
Total Stockholders' Equity	270,000	18,165
Total Liabilities and Stockholders' Equity	698,583	24,200

Draper Consulting Inc.
Income Statement
Year Ended December 31, 2012
Revenue:
Service Revenue		3,850
Expenses:
Rent Expense	550
Utilities Expense	250
Salary Expense	685
Depreciation Expense - Equipment	30
Depreciation Expense - Furniture	70
Supplies Expense	700
Total Expenses		2,285
Net Income		1,565

a. Current Ratio Current Assets Current Liabilities Current Ratio b. Debt Ratico c. Debt to Equity Ratio Total Equity Debt to Equity Rato d. Earnings Per Share Earnings Per Share e. P/E Ratio Market Price Per Share Earnings Per Share f Rate of Return on Total Assets Average Total Assets Return on Total Assets . Rate of Return on Common Stockholders' Equity