Using ratios to evaluate a stock investment
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Comparative financial statement data of Danfield, Inc., follow:
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1. Market price of Danfield's common stock: $86.58 at December 31, 2012, and $46.54 at December 31, 2011.
2. Common shares outstanding: 12,000 during 2012 and 10,000 during 2011 and 2010.
3. All sales on credit.
Requirements
1. Compute the following ratios for 2012 and 2011:a.Current ratio
b. Times-interest-earned ratio
c. Inventory turnover
d. Gross profit percentage
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The expert uses ratio to evaluate a stock investment.
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Dear student,
Following ratios are provided with formulation, ...
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