Use the data given in PB13-1 for Tiger Audio.

Required:
1. Compute the gross profit percentage in 2013 and 2012. Is the trend going in the right direction?
2. Compute the net profit margin for 2013 and 2012. Is the trend going in the right direction?
3. Compute the earnings per share for 2013 and 2012. Does the trend look good or bad? Explain.
4. Stockholders' equity totaled $65,000 at the end of 2011. Compute the return on equity ratios for 2013 and 2012. Is the trend going in the right direction?
5. Net property and equipment totaled $115,000 at the end of 2011. Compute the fixed asset turnover ratios for 2013 and 2012. Is the trend going in the right direction?
6. Compute the debt-to-assets ratios for 2013 and 2012. Is debt providing financing for a larger or smaller proportion of the company's asset growth? Explain.
7. Compute the times interest earned ratios for 2013 and 2012. Do they look good or bad? Explain.
8. After Tiger released its 2013 financial statements, the company's stock was trading at $17.
After the release of its 2012 financial statements, the company's stock price was $12 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Tiger's future success?

Transcribed Image Text:

Increase (Decrease) in 2013 (versus 2012) 2013 2012 Amount Percentage Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income $222,000 $185,000 111,000 74,000 33,730 3,270 37,000 11,100 $35,525 25.900 127,650 94,350 39,600 4,000 50,750 15,225 Balance Sheet as Accounts Receivable, Net Inventory Property and Equipment, Net Total Assets 40,000 38,000 16,000 22,000 119,000 $210,500 $195,000 18,500 25,000 127,000 Accounts Payable Income Tax Payable Note Payable, Long-term Total Liabilities Capital Stock (par $1) Retained Earnings Total Liabilities and Stockholders' Equity $27,000 25,000 2,800 92,200 120,000 25,000 50,000 $210,500 $195,000 3,000 75,500 105,500 25,000 80,000