Financial Statement analysis

Argo sales corporation has in recent years maintained the following relationships among the data on its financial statements: gross profit margin 40%- net profit margin 10%- rate of selling expenses to net sales 20%- accounts receivable turnover 8 times per year- inventory turnover 6 times per year- quick-asset composition: 8% cash, 32% marketable securities, 60% accounts receivable- acid-test ratio (quick ratio) 2:1- current ratio: 3:1- asset turnover: 2 per year- ratio of total assets to intangible assets 20:1- ratio of accumulated depreciation to gross property, plant and equipment : 1:3- ratio of accounts receivable to accounts payable: 1.5:1- ratio of working capital to stockholders equity: 1:1.6- debt/equity ratio: 1:2The corporation had a net income of $120,000 for 2009, which resulted in earnings of $5.20 per share of common stock. no common or preferred shares were sold or bought back during 2004. the corporation does not have minority share of earnings, equity income or non-recurring items.Additional information includes the following: capital stock authorized, issued (all in 2000), and outstanding:- common, $10 per share per share, issued at 10% premium.- preferred, 6% nonparticipating, $100 per share par value, issued at a 10% premium.- market value per share of common at december 31, 2009: $78.- preferred dividends paid in 2004: $3,000.- times interest earned in 2009: 33.- the amounts of the following were the same at december 31, 2009, as at january 1, 2009: inventory, accounts receivable, 5% bonds payable due 2017, and total stockholders’ equity. All purchases and sales were on accountA) Prepare in good form the condensed balance sheet and income statement for the year ending December 31, 2009, presenting the amounts you would expect to appear on Argos financial statements (ignoring income taxes). Major captions appearing in Argos balance sheet are current assets, fixed assets, intangible assets, current liabilities, long-term liabilities and stockholder’s equity. In addition to the accounts divulged in the problem, you should include accounts for prepaid expenses, accrued expenses and administrative expenses. Supporting computations should be in good form.B) Compute the following for 2009 (show computations)a. Rate of return on stockholders equityb. Price/earnings ratio for common stock`c. Dividends paid per share of common stockd. Dividends paid per share of preferred stocke. Yield on common stock