The following financial information is for Sandhill Company. Sandhill Company Balance Sheets December 31 Assets 2025 2024 Cash $69,000 $66,000 Debt investments (short-term) 50,000 42,000 Accounts receivable (net) 106,000 92,000 Inventory 238,000 166,000 Prepaid expenses 25,000 24,000 Land 132,000 132,000 Building and equipment (net) 264,000 184,000 Total assets $884,000 $706,000 Liabilities and Stockholders' Equity Notes payable (current) $169,000 $105,000 Accounts payable 68,000 51,000 Accrued liabilities 42,000 42,000 Bonds payable, due 2028 252,000 169,000 Common stock, $10 par 209,000 209,000 Retained earnings 144,000 130,000 Total liabilities and stockholders' equity $884,000 $706,000 Sandhill Company Income Statements For the Years Ended December 31 2025 2024 Net sales $888,000 $782,000 Cost of goods sold 640,000 576,000 Gross profit 248,000 206,000 Operating expenses 195,000 158,000 Net income $53,000 $48,000 Additional information: 1. Inventory at the beginning of 2024 was $116,000. 2. Accounts receivable (net) at the beginning of 2024 were $88,000. 3. Total assets at the beginning of 2024 were $642,000. 4 4. 5. No common stock transactions occurred during 2024 or 2025. All sales were on credit. Compute liquidity and profitability ratios, and indicate the percentage change in liquidity and profitability ratios of Sandhill Company from 2024 to 2025. (Note: Not all profitability ratios can be computed, nor can cash-basis ratios be computed.) (Round Curent ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 15.50. Round % change to O decimal places, for e.g. 1%. Round all other answers to 1 decimal place, e.g. 15.5. If % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 2025 2024 LIQUIDITY Current ratio 1.75 :1 1.97 :1 % Change -11.2 Accounts receivable 8.97 times 8.69 times 3.23 turnover Inventory 3.17 times 4.09 times -22.44 turnover 2025 PROFITABILITY Profit margin Asset turnover Return on assets Earnings per share +A 5.97 % 2024 6.14 % de % % do % % Change -2.76 1.12 times 1.16 times -3.73 6.67 2.54 do % 7.12 % -6.39 2.30 10.42 The following are three independent situations and a ratio that may be affected. For each situation, compute the affected r as of December 31, 2025, and (2) as of December 31, 2026, and percentage change in each ratio after giving effect to the situation. (Round Debt to assets ratio to O decimal places, e.g. 15 and round all other answers to 1 decimal place & intermediate calculation to two decimal places wherever required, e.g. 15.5. Round % change to O decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 1. Situation 19,000 shares of common stock were sold at par on July 1, 2026. Net income for 2026 was $52,000, and there were no dividends. Ratio Return on common stockholders' 2. All of the notes payable were paid in 2026. All other liabilities remained at their December 31, 2025, levels. Total assets on December 31, 2026, were $868,000. Debt to assets ratio 3. The market price of common stock was $9 and $12 on December 31, 2025 and 2026, respectively. Net income for 2026 was $52,000. (Use a simple average calculation for EPS.) Return on common stockholders' equity Debt to assets ratio Price-earnings ratio 2025 % de % times Price-earnings ratio 2026 % do % do times % Change % % %