FIN Problem - Pettijohn Inc.

The balance sheet and income statement shown below are for Pettijohn Inc. Calculate the liquidity, asset management, debt management, profitability, and market value ratios for Pettijohn. Based on these financial ratios, what are some of the firm’s financial strengths and weaknesses? Construct the firm’s DuPont Equation and discuss what factors are driving (or impeding) profitability.

Balance Sheet (Millions of $)
Assets 2012
Cash and securities $ 1,554.0
Accounts receivable 9,660.0
Inventories 13,440.0
Total current assets $24,654.0
Net plant and equipment 17,346.0
Total assets $42,000.0
Liabilities and Equity
Accounts payable $ 7,980.0
Notes payable 5,880.0
Accruals 4,620.0
Total current liabilities $18,480.0
Long-term bonds 10,920.0
Total debt $29,400.0
Common stock 3,360.0
Retained earnings 9,240.0
Total common equity $12,600.0
Total liabilities and equity $42,000.0

Income Statement (Millions of $) 2012
Net sales $58,800.0
Operating costs except depr'n $54,978.0
Depreciation $ 1,029.0
Earnings bef int and taxes (EBIT) $ 2,793.0
Less interest 1,050.0
Earnings before taxes (EBT) $ 1,743.0
Taxes $ 610.1
Net income $ 1,133.0
Other data:
Shares outstanding (millions) 175.00
Common dividends $ 509.83
Int rate on notes payable & L-T bonds 6.25%
Federal plus state income tax rate 35%
Year-end stock price $77.69