The comparative balance sheet of Posner Company, for 2010 and the preceding year ended December 31,2009, appears below in condensed form: (year 2010 coming first)

Cash 53,000 50,000

Accounts Receivable (net) 37,000 48,000

Inventories 108,500 100,000

Investments ....... 70,000

Equipment 573,200 450,000

Accumulated Depreciation-equipment (142,000) (176,000)

629,700 542000

Accounts payable 62500 43,800

Bonds payable due 2010 ..... 100,000

Common stock $10 par 325,000 285,000

paid in capital in excess of par--common stock 80,000 55,000

retained earnings 162,200 58,200

629700 542000

The income statement for the current year is as follows:

Sales 625700

Cost of merchandise sold 340000

Gross Profit 285700

Operating expenses:

Depreciation expense 26000

other operating expenses 68000 94000

income from operations 191700

other income:

gain on sale of investment 4000

Other expense:

interest expense 6000 (2000)

income before income tax 189700

income tax 60700

net income 129000

Additional data for the current year are as follows:

a) Fully depreciated equipment costing 60,000 was scrapped, no salvage, and equipment was purchased for 183200

b) bonds payable for 100000 were retired by payment at their face amount

c) 5000 shares of common stock were issued at 13 dollars for cash.

d) cash divedends declared and paid, 25000.

1. prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities.

2. Using the balance sheet from above conduct a horizontal analysis to determine the changes in balance sheet accounts for years 2009 and 2010.

3. Using vertical analysis, compute the following analytical measures for year 2010:

.solvency measures:

current ratio

quick ratio

accounts receivable turnover

inventory turnover

.Profitability measures:

Earnings per share of common stock

dividends per share of common stock

dividend yield

perform any other analysis you feel is appropriate.

Write a brief assessment of the financial condition of this company, based upon the above analytical measures.

Assuming the current market value of common stock is $20 per share, would you recommend purchasing the stock? why or wht not?

please help.