GET SOLUTION OF THIS QUESTION FROM OUR WEBSITE ONLINESOLUTIONPROVIDERS

Minerva Corporation Income Statement
For the years Ended December 31
 

2013

2012

Sales

$4,922,142

$3,433,972

(-) Cost of Goods Sold

$3,342,111

$1,383,209

Gross Profit

$1,580,031

$2,050,763

Operating Expenses
    Advertising

$38,000

$34,000

Insurance

$272,000

$272,000

Salaries & Wages

$333,969

$292,693

Depreciation

$85,222

$62,319

Other Operating Expenses

$34,222

$18,472

Total Operating Expenses

$763,413

$679,484

Income Before Income Tax

$816,618

$1,371,279

Income Tax Expense

$244,985

$411,384

Net Income

$571,633

$959,895

Minerva Corporation Balance Sheet
For the years Ended December 31
Accounts Receivable

$505,544

$322,429

Inventory

$19,925

$12,500

Prepaid Expenses

$76,250

$34,250

Total Current Assets

$1,395,711

$833,150

Property, Plant & Equipment
    Land

$300,000

$275,000

Buildings

$925,000

$625,000

Equipment

$792,900

$742,900

Furnishings

$41,950

$41,950

Accumulated Depreciation

($567,745)

($278,484)

Total Property, Plant and Equipment

$1,492,105

$1,406,366

Total Assets

$2,887,816

$2,239,516

      Liabilities and Stockholders' Equity
    Current liabilities
    Accounts payable

$122,922

$78,282

Income Tax payable

$109,200

$79,200

Wages payable

$1,700

$1,422

Other Current Liabilities

$21,200

$19,496

Total current liabilities

$255,022

$178,400

Long-term Liabilities
    Notes Payable

$0

$0

Total Liabilities

$255,022

$178,400

Stockholders Equity
    Common Stock

$1,294,000

$1,294,000

Retained Earnings

$1,338,794

$767,116

Total Stockholders' equity

$2,632,794

$2,061,116

Total Liabilities and Stockholders' equity

$2,887,816

$2,239,516

One basis of the above information, you are required to:
(1) Prepare a horizontal analysis of income statement using 2012 as the base year.
(2) Prepare a vertical analysis of the income statement for 2013.
(3) Calculate the following ratios for 2013 and indicate whether the ratio is a liquidity, solvency, pr profitability ratio.
(a)  Asset turnover ratio.
(b)  Receivables turnover ratio.
(c)   Average collection period.
(d)  Current ratio.
(e)  Debt to total asset ratio.
(f)   Earnings per share.
(g)  Profit margin rate.
(h)  Return on asset ratio.
(i)     Return on common stockholders’ equity ratio.
(4) Comment on your findings. Company’s credit ratings are of the highest possible grade for a company to achieve.