The following financial information is for Sunland Company.

SUNLAND COMPANY

Balance Sheets

December 31

Assets

2022

2021

Cash

$69,000

$69,000

Debt investments (short-term)

53,000

41,000

Accounts receivable

103,000

92,000

Inventory

239,000

164,000

Prepaid expenses

25,000

29,000

Land

132,000

132,000

Building and equipment (net)

263,000

188,000

Total assets

$884,000

$715,000

Liabilities and Stockholders' Equity

Notes payable

$170,000

$101,000

Accounts payable

66,000

54,000

Accrued liabilities

42,000

42,000

Bonds payable, due 2025

251,000

170,000

Common stock, $10 par

205,000

205,000

Retained earnings

150,000

143,000

Total liabilities and stockholders' equity

$884,000

$715,000

SUNLAND COMPANY

Income Statements

For the Years Ended December 31

2022

2021

Sales revenue

$890,000

$791,000

Cost of goods sold

643,000

576,000

Gross profit

247,000

215,000

Operating expenses

190,000

160,000

Net income

$57,000

$55,000

Additional information:

1.Inventory at the beginning of 2021 was $115,000.2.Accounts receivable (net) at the beginning of 2021 were $90,000.3.Total assets at the beginning of 2021 were $631,000.4.No common stock transactions occurred during 2021 or 2022.5.All sales were on account.

(a1)

Compute the liquidity and profitability ratios of Sunland Company for 2021 and 2022.(Round Curent ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 15.50 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to 0 decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).)

2021

2022

% Change

LIQUIDITY

Current ratio

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%Inventory turnover

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2021

2022

% Change

PROFITABILITY

Profit margin

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%Asset turnover

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%Return on assets

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%Earnings per share

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(b)

Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation.(Round Debt to assets ratio to 0 decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to 0 decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).)

Situation

Ratio

1.

19,000shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $55,000.

Return on common stockholders' equity2.

All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total assets on December 31, 2023, were $867,000.

Debt to assets ratio3.

The market price of common stock was $9and $13on December 31, 2022 and 2023, respectively.

Price-earnings ratio

2022

2023

% Change

Return on common stockholders' equity

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%Debt to assets ratio

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%Price earnings ratio

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