Star Industries Inc comparative financial statements for the years ending December 31, 2010 and 2009, are as follows. The market price for Star Industries common stock was $ 20 on December 31, 2009, and $ 32 on December 31, 2010. Common stock shares outstanding for both 2010 and 2009 are 70000 shares (Ie $ 700,000 / $ 10 par)

Star Industries

Comparative Income Statement

For the Years Ended December 31, 2010 and 2009

	2010		2009
Sales	$7,000,000		$5,670,000
Sales returns and allowances	$325,000		$175,000
Net Sales	$6,675,000		$5,495,000
Cost of Goods Sold	$4,850,000		$3,950,000
Gross Profit	$1,825,000		$1,545,000
Selling Expenses	$780,000		$464,000
Administrative Expenses	$485,000		$423,000
Total Operating Expenses	$1,465,000		$887,000
Income From Operations	$360,000		$658,000
Other Income	$25,000		$19,200
Earnings before Interest & taxes (EBIT)	$385,000		$677,200
Other Expenses (interest)	$105,000		$64,000
Income Before Income Tax	$280,000		$613,200
Income Tax Expense	$35,000		$176,000
Net Income	$245,000		$437,200

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Star Industries

Comparative Retained Earnings Statement

For the Years Ended December 31, 2010 and 2009

	2010		2009
Retained Earnings, Januray 1	$ 723,000		$ 355,800
Add Net Income for year	$245,000		$437,200
Total	$ 968,000		$ 793,000
Deduct dividends:
Preferred Stock	$ 40,000		$ 40,000
Common Stock	$ 45,000		$ 30,000
Total	$ 85,000		$ 70,000
Retained Earnings, December 31	$883,000		$ 723,000

Star Industries

Comparative Balance Statement

December 31, 2010 and 2009

			12-31-2010		12-31-2009
Assets
Current Assets
Cash			$235,000		$215,000
Temporary Investments			$10,000		$50,000
Accounts Receivable (Net)			$525,000		$425,000
Inventories			$940,000		$580,000
Prepaid Expenses			$30,000		$20,000
Total Current Assets			$1,740,000		$1,290,000
Long-Term Investments			$165,000		$135,000
Property, Plant and Equipment (Net)			$2,525,000		$1,878,000
Total Assets			$4,430,000		$3,303,000
Liabilities
Current Liabilities			$950,000		$780,000
Long-Term Liabilities
Mortgage Note Payable 8% (due 2013)			$410,000		$0
Bonds Payable, 7% (due 2016)			$1,200,000		$800,000
Total Long Term Liabilities			$1,610,000		$800,000
Total Liabilities			$2,560,000		$1,580,000
Stockholders' Equity
Preferred 8% stock, $ 100 Par			$300,000		$300,000
Common Stock, $ 10 Par			$700,000		$700,000
Retained Earnings			$883,000		$723,000
Total Stockholders' Equity			$1,883,000		$1,723,000
Total Liabilities and Stockholders' Equity			$4,443,000		$3,303,000

Determine the following measures for 2010: Compare with industry norms and comment:

			Ratios		Industry Norm
1. Working Capital					N/A
2. Current Ratio					2.2
3. Quick Ratio					0.8
4. Accounts Receivable Turnover					16.0
5. Number of days sales in receivables					22.2
6. Inventory Turnover					5.0
7. Number of days sales in inventory					75.0
8. Ratio of fixed assets to long-term liabilites					2.0
9. Ratio of liabilities to stockkholders equity					0.7
10. Number of times interest charges are earned					8.5
11. Number of times preferred dividends earned					7.1
12. Ratio of net sales to assets					2.1
13. Rate earned on total assets					8.5%
14. Rate earned on stockholders' equity					12.0%
15. Rate earned on common stockholders' equity					14.2%
16. Earnings per share on common stock					$3.65
17. Price-earnings ratio					9.2
18. Dividends per share					$0.80
19. Dividend yield					2.50%

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