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Financial information for Hanshew Company is presented below.
HANSHEW COMPANY
Balance Sheets
December 31

Assets 2009 2008
Cash $ 73,500 $ 68,250
Short-term investments 54,600 42,000
Receivable (net) 102,900 84,000
Inventories 131,250 141,750
Prepaid expenses 30,450 24,150
Land 136,500 136,500
Building and equipment (net) 189,000
183,750

$718,200
$680,400


Liabilities and Stockholders' Equity
Notes payable $105,000 $105,000
Accounts payable 50,400 44,100
Accrued liabilities 52,500 42,000
Bonds payable, due 2012 157,500 157,500
Common stock, $10 par 210,000 210,000
Retained earnings 142,800
121,800

$718,200
$680,400


HANSHEW COMPANY
Income Statement
For the Years Ended December 31

2009 2008
Sales $912,500 $849,500
Cost of goods sold 651,000
603,750

Gross profit 261,500 245,750
Operating expenses 202,550
187,850

Net income $ 58,950
$ 57,900



Additional information:

Inventory at the beginning of 2008 was $143,900.

Receivables (net) at the beginning of 2008 were $92,400. The allowance for doubtful accounts was $4,200 at the end of 2009, $3,990 at the end of 2008, and $3,885 at the beginning of 2008.

Total assets at the beginning of 2008 were $681,500.

No common stock transactions occurred during 2008 or 2009.

All sales were on account.






Indicate, by using ratios, the change in liquidity and profitability of Hanshew Company from 2008 to 2009. (Note: Not all profitability ratios can be computed.) (Round earnings per share, asset turnover and return on assets to 2 decimal places and all other answers to 1 decimal place.)
2008 2009
Current :1 :1
Acid-test :1 :1
Receivables turnover times times
Inventory turnover times times
Profit margin % %
Asset turnover times times
Return on assets % %
Earnings per share $ $







Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2009, and (2) as of December 31, 2010, after giving effect to the situation. Net income for 2010 was $58,700. Total assets on December 31, 2010, were $735,000. (Round answers to 1 decimal place.)
Situation
Ratio

(1) 18,900 shares of common stock were sold at par on
July 1, 2010. Return on common stockholders' equity.
(2) All of the notes payable were paid in 2010. The only change in liabilities was that the notes payable were paid. Debt to total assets
(3) Market price of common stock was $9 on December 31, 2009, and $13.44 on December 31, 2010. Price-earnings ratio


2009 2010
Return on common stockholders' equity % %
Debt to total assets % %
Price-earnings ratio times times