Reference no: EM131138161

Problem - Condensed balance sheet and income statement data for Jernigan Corporation

JERNIGAN Balance Sheets December 31
	2014	2013	2014
Cash	$30,000	$20,000	$18,000
Accounts receivable (net)	50,000	45,000	48,000
Other current assets	90,000	95,000	64,000
Investments	55,000	70,000	45,000
Plant and equipment (net)	500,000	370,000	358,000
	$725,000	$600,000	$533,000
Current liabilities	$85,000	$80,000	$70,000
Long-term debt	145,000	85,000	50,000
Common stock, $10 par	320,000	310,000	300,000
Retained earnings	175,000	125,000	113,000
	$725,000	$600,000	$533,000

JERNIGAN CORPORATION Income Statements For the Years Ended December 31
	2014	2013
Sales revenue	$740,000	$600,000
Less: Sales returns and allowances	40,000	30,000
Net sales	700,000	570,000
Cost of goods sold	425,000	350,000
Gross profit	275,000	220,000
Operating expenses (including income taxes)	180,000	150,000
Net income	$95,000	$70,000

Additional information:

1. The market price of Jernigan's common stock was $7.00, $7.50, and $8.50 for 2012, 2013, and 2014 respectively.

2. You must compute dividends paid. All dividends were paid in cash.

Instructions-

(A) Compute the following ratios for 2013 and 2014.

i) Profit margin

ii) Gross profit rate

iii) Asset turnover

iv) Earnings per share

v) Price-earnings ratio

vi) Payout ratio

vii) Debt to assets ratio

(B) Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results from 2013 to 23014 of Jernigan Corporation.