Brooks Plumbing Products, Inc. (BPP) manufactures plumbing fixtures and other home improvement products that are sold in Home Depot and Walmart as well as hardware stores. BPP has a solid reputation for providing value products, good quality, and a good price. The company has been approached by an investment banking firm representing a third company, Garden Specialties Inc. (GSI) ,that is interested in acquiring BPP. The acquiring firm (GSI) is a retailer of garden supplies;it sees the potential synergies of the combined firm and is willing to pay BPP shareholders $38 cash per share for their stock, which is greater than the current stock price; the stock has traded at about $35 in recent months. Summary financial information about BPP follows.

Required

Evaluate BPP as a company using financial ratio analysis. Since the calculation of some ratios requires the averaging of balances, you may assume that the balances in 2014 are the same as those in 2015.

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BROOKS PLUMBING PRODUCTS, INC. Selected Financial Information 2016 Industry Average 6 Number of outstanding shares Free cash flow multiplier Accounts receivable turnover 0 Gross margin percentage Return on assets (net book value) Operating expense includes depreciation expense.