Condensed balance sheet and income statement data for Kersenbrock Corporation

Price: $2.50


Condensed balance sheet and income statement data for Kersenbrock Corporation appear
below.

Kersenbrock Corporation
Balance Sheet
31-Dec
	2009	2008	2007
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	75,000	80,000	70,000
Long-term debt	80,000	85,000	50,000
Common stock, $10 par	340,000	310,000	300,000
Retained earnings	145,000	125,000	113,000
	640,000	600,000	533,000

Kersenbrock Corporation
Income Statement
For the Year Ended December 31
	2,009	2,008
Sales revenue	740,000	700,000
Less: Sales returns and allowances	40,000	50,000
Net sales	700,000	650,000
Cost of goods sold	420,000	400,000
Gross profit	280,000	250,000
Operating expenses (incl. income taxes)	235,000	220,000
Net income	45,000	30,000

Additional information:
1. The market price of Kersenbrock’s common stock was $4.00, $5.00, and $8.00 for 2007, 2008,
and 2009, respectively.
2. All dividends were paid in cash.

Instructions
(a) Compute the following ratios for 2008 and 2009.
(1) Profit margin.
(2) Asset turnover.
(3) Earnings per share. (Weighted-average-common shares in 2009 were 32,000 and in 2008
were 31,000.)
(4) Price-earnings.
(5) Payout.
(6) Debt to total assets.