Artz, Inc.'s financial statements for 2015 are shown below:

Sales ........................................................ $ 4,500

Cost of goods sold ........................................ (2,800)

Gross profits ............................................... $ 1,700

Operating expenses

Marketing, general, and administrative expenses ......... $(1,000)

Depreciation expense .............................................. (200)

Total operating expenses .................................... $(1,200)

Operating profits .................................................. $ 500

Interest expense ..................................................... (60)

Earnings before taxes (taxable income) ....................... $ 440

Income taxes ...................................................... (125)

Net Income ........................................................ $ 315

Liabilities (Debt) and Equity

Cash ................................................................. $ 500

Accounts receivable .............................................. 600

Inventories ......................................................... 900

Total current assets ........................................... $ 2,000

Gross fixed assets ............................................. $ 2,100

Accumulated depreciation ..................................... (800)

Net fixed assets ............................................... $ 1,300

Total assets ..................................................... $ 3,300

Liabilities (Debt) and Equity

Accounts payable .............................................. $ 500

Short-term notes payable ........................................ 300

Total current liabilities ......................................... $ 800

Long-term debt .................................................... 400

Total liabilities ................................................... $ 1,200

Common equity

Common stock (par and paid-in capital) ...................... $ 500

Retained earnings ................................................ 1,600

Total common equity ................................... $ 2,100

Total liabilities and equity .............................. $ 3,300

The chief financial Officer for Artz has acquired industry averages for the following ratios:

Current ratio .............................................. 3.0

Acid-test ratio ........................................... 1.50

Days in receivables ..................................... 40.0

Days in inventories .................................... 70.2

Operating return on assets ........................... 12.5%

Operating profit margin ............................... 8.0%

Total asset turnover ..................................... 1.6

Fixed-asset turnover ..................................... 3.1

Debt ratio ............................................. 33.0%

Times interest earned .................................... 6.0

Return on equity ...................................... 11.0%

a. Compute the ratios listed above for Artz.

b. Compared to the industry:

1. How liquid is the firm?

2. Are its managers generating an attractive operating profit on the firm's assets?

3. How is the firm financing its assets?

4. Are its managers generating a good return on equity?