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Clarence Corp 25000

Price: $2.50


Condensed balance sheet and income statement data for Clarence Corporation
appear below



201420132012
Cash  25,000  20,000  18,000
Receivables (net)  50,000  45,000  48,000
Other current assets  90,000  95,000  64,000
Investments  75,000  70,000  45,000
Plant and equipment (net)  400,000  370,000  358,000
 640,000  600,000  533,000
Current liabilities  70,000  75,000  70,000
Long-term debt  80,000  85,000  50,000
Common stock, $10 par  345,000  315,000  300,000
Retained earnings  145,000  125,000  113,000
 640,000  600,000  533,000
Income Statement
 2,014  2,013
Sales revenue  740,000  700,000
Less: Sales returns and allowances  40,000  60,000
 Net sales   700,000  640,000
 Cost of goods sold   420,000  400,000
 Gross profit   280,000  240,000
 Operating expenses (incl. income taxes)  238,000  208,000
 Net income   42,000  32,000 

Additional information:
1. The market price of Clarence’s common stock was $4.00, $5.00, and $8.00 for 2012,
2013, and 2014, respectively.
2. All dividends were paid in cash.

Instructions
(a) Compute the following ratios for 2013 and 2014.
(1) Profi t margin.
(2) Asset turnover.
(3) Earnings per share. (Weighted-average common shares in 2014 were 32,000 and in
2013 were 31,000.)
(4) Price-earnings.
(5) Payout.
(6) Debt to total assets.

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