=+P9-4 Nineteen measures ofsol¬

vency and profitability Objs 2, 3 SPREADSHEET A 9. Ratio of liabilities to stockholders’

equity, 0.5 The comparative financial statements ofTriad Images Inc. are as follows. The market price of Triad Images Inc. common stock was $55 on December 31, 2008.

TRIAD IMAGES INC.

Comparative Retained Earnings Statement For the Years Ended December 31, 2008 and 2007 Dec. 31,2008 Dec. 31, 2007 Retained earnings, January 1 $1,006,500 $ 781,500 Add net income for year 430,000 277,500 Total $1,436,500 $1,059,000 Deduct dividends:

On preferred stock $ 12,500 $ 12,500 On common stock 40,000 40,000 Total $ 52,500 $ 52,500 Retained earnings, December 31 $1,384,000 $1,006,500 TRIAD IMAGES INC.

Comparative Income Statement For the Years Ended December 31, 2008 and 2007 2008 2007 Sales $3,395,000 $ 3,062,500 Sales returns and allowances 35,000 22,500 Net sales $3,360,000 $ 3,040,000 Cost of goods sold 1,500,000 1,437,500 Gross profit $1,860,000 $ 1,602,500 Selling expenses $ 726,000 $ 718,750 Administrative expenses 486,000 475,000 Total operating expenses $1,212,000 $ 1,193,750 Income from operations $ 648,000 $ 408,750 Other income 48,000 37,500

$ 696,000 $ 446,250 Other expense (interest) 98,000 50,000 Income before income tax $ 598,000 $ 396,250 Income tax expense 168,000 118,750 Net income $ 430,000 $ 227,500 TRIAD IMAGES INC.

Comparative Balance Sheet December 31, 2008 and 2007 Dec. 31, 2008 Dec. 31, 2007 Assets Current assets:

Cash $ 132,000 $ 120,000 Marketable securities 387,000 157,500 Accounts receivable (net) 260,000 196,500 Inventories 425,000 332,500 Prepaid expenses 27,500 35,000 Total current assets $1,231,500 $ 841,500 Long-term investments 319,500 250,000 Property, plant, and equipment (net) 2,575,000 2,000,000 Total assets $4,126,000 $3,091,500 Liabilivties