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Question

Financial statement data for Chen Corporation is as follows:


Service

revenue               $1,800,000

Operating expenses           $1,458,000

Interest expense              $10,000

Income Tax expense            $85,000

Current assets                 $4,07,200

Non-current assets            $532,000

Current liabilities              $1,66,325

Non-current liabilities         $108,500

Share price                    $25

Weighted average number of common shares    $76,000


Instructions

a) Calculate working capital. Comment on the relative liquidity.


b) Calculate the current ratio. Comment on the relative liquidity. 


c) Calculate the Net Income. the basic earnings per share, and the price earnings ratio.

Assume that the Net Income you calculate equals the income available to common

shareholders. Comment on the relative profitability 

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