The financial statements of Johannsen Inc. are presented here:

Additional information:
1. Profit available to common shareholders was $160,000.
2. The weighted average number of shares was 40,000.
3. The share price at December 31 was $35.
Instructions
(a) Calculate the following values and ratios for 2012. We provide the results for 2011 for comparative purposes.
1. Working capital (2011: $260,500)
2. Current ratio (2011: 1.6:1)
3. Debt to total assets (2011: 31.5%)
4. Earnings per share (2011: $3.15)
5. Price-earnings ratio (2011: 7.5 times)
(b) Using the information in part (a), discuss the changes in liquidity, solvency, and profitability between 2011 and 2012.

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OHANNSEN INC. Income Statement Year Ended December 31,2012 Sales Expenses $2,218,500 Cost of goods sold Operating expenses Interest expense $1,012,500 906,000 Profit before income tax Income tax expense Profit 98,000 2,016,500 202,000 42,000 $160,000 JOHANNSEN INC. Statement of Financial Position December 31, 2012 Assets Current assets Cash Short-term investments Accounts receivable Merchandise inventory 60,100 54,000 207,800 Property, plant, and equipment Total assets 125,000 $ 446,900 625,300 $1,072,200 Liabilities and Shareholders' Equity Current liabilities Accounts payable Income tax payable Current portion of mortgage payable27,500 $100,000 15,000 $ Mortgage payable Total liabilities Shareholders' equity 142,500 310,000 452,500 Common shares Retained earnings $307,630 312,070 619,700 $1,072,200 Total liabilities and shareholders' equity