Westward Corporation

The condensed financial statements of Westward Corporation for 2009 and 2008 are presented below.

Westward Corporation    Westward Corporation
Balance Sheet    Income Statement
December 31, 2009    For the Year Ended December 31, 2009

Assets    Revenues    $2,000,000
Current assets     Expenses
Cash and temporary     Cost of goods sold    1,080,000
investments    $ 30,000     Selling and administrative
Accounts receivable    70,000     expenses    495,000
Inventories     120,000     Interest expense     30,000
Total current assets    220,000     Total expenses 1,605,000
Property, plant, and     Income before income taxes    395,000
equipment (net)     780,000    Income tax expense 140,000
Total assets    $1,000,000    Net income    $ 255,000


Liabilities and Stockholders' Equity
Current liabilities    $ 80,000
Long-term liabilities    300,000
Common stockholders' equity     620,000
Total liabilities and
stockholders' equity    $1,000,000






Westward Corporation    Westward Corporation
Balance Sheet    Income Statement
December 31, 2008     For the Year Ended December 31, 2008

Assets    Revenues    $2,500,000
Current assets     Expenses
Cash and temporary     Cost of goods sold    1,750,000
investments    $ 40,000     Selling and administrative
Accounts receivable    90,000     expenses    500,000
Inventories     150,000     Interest expense     30,000
Total current assets    280,000     Total expenses 2,280,000
Property, plant, and     Income before income taxes    220,000
equipment (net)     800,000    Income tax expense 77,000
Total assets    $1,080,000    Net income    $ 143,000


Liabilities and Stockholders' Equity
Current liabilities    $ 140,000
Long-term liabilities    320,000
Common stockholders' equity     620,000
Total liabilities and
stockholders' equity    $1,080,000




Select data from fiscal year 2007:

Inventory: $100,000
Total assets: $900,000
Stockholders’ Equity: $540,000   

Instructions

1.    Compute the following listed ratios for 2009 and 2008 showing supporting calculations. (5.2 points)
a.    Current ratio
b.    Debt to total Assets
c.    Times interest earned
d.    Inventory turnover
e.    Profit margin ratio
f.    Return on common stockholders' equity
g.    Return on assets

2.    Perform horizontal and vertical analysis on Westward’s financial statements, show your results. (3.0 points)

3.    Assess the financial performance of Westward, given the analysis tools used in questions 1 and 2 above. (5.3 points)

4.    If the company wanted to perform industry comparison analysis, what references would you recommend it use? (1.5 points)