The financial statements of Petra Company appear below: PETRA COMPANY
Comparative Statements of Financial Position
December 31,
——————————————————————————————————— ———————
Assets 2017 2016
Property, plant and equipment (net) $260,000 $300,000
Inventory 50,000 70,000
Accounts receivable (net) 50,000 30,000
Short-term investments 15,000 60,000
Cash 25,000 40,000
Total assets $400,000 $500,000

Equity and liabilities
Share capital – ordinary $150,000 $150,000
Retained earnings 110,000 70,000
Bonds payable 80,000 160,000
Accounts payable 20,000 30,000
Short-term notes payable 40,000 90,000
Total equity and liabilities $400,000 $500,000

PETRA COMPANY
Income Statement
For the Year Ended December 31, 2017

Net sales $400,000
Cost of goods sold 240,000
Gross profit 160,000
Operating expenses 42,000
Income from operations 118,000
Interest expense 18,000
Income before income taxes 100,000
Income tax expense 30,000
Net income $ 70,000

Additional information:
a. Cash dividends of $23,000 were declared and paid in 2017.
b. Weighted-average number of ordinary shares outstanding during 2017 was 30,000 shares.
c. Market value of ordinary shares on December 31, 2017, was $21 per share.

Required:
A. Using the financial statements and additional information, compute the following ratios for Petra Company for 2017. (Show all computations).
1. Current ratio.
2. Return on ordinary shareholders' equity.
3. Price-earnings ratio.
4. Acid-test ratio.
5. Accounts receivable turnover.
6. Times interest earned .
7. Profit margin.
8. Days in inventory.
9. Payout ratio.
10. Return on assets.

B. Comment on the first 5 findings.