Comparative Ratio Analysis Use the comparative data for Sunshine State Equipment, Inc., as given in…


Question Description:

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Comparative Ratio Analysis Use the comparative data for Sunshine State Equipment, Inc., as given in Problem 22-42. In addition, the year-end price per share of Sunshine’s stock was $50 for 2006, $25 for 2007, and $35 for 2008. Instructions: 1. Compute financial ratios for the three years 2006–2008 as follows (for ratios normally using average balances, assume that 2005 figures are the same as 2006): (a) Accounts receivable turnover (b) Average collection period (c) Inventory turnover (d) Number of days’ sales in inventory (e) Fixed asset turnover (f) Debt ratio (g) Debt-to-equity ratio (h) Times interest earned (Assume that Bonds Payable is the only interest-bearing liability.) (i) Earnings per share (j) Price-earnings ratio (k) Book-to-market ratio 2. Based on the ratios calculated in (1), evaluate Sunshine State Equipment, Inc., in 2008 as compared with 2007.

Answer

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