Data for Morton Chip Company and its industry averages follow.

a. Calculate the indicated ratios for Morton.

b. Construct the extended Du Pont equation for both Morton and the industry.

c. Outline Morton's strengths and weaknesses as revealed by your analysis.

d. Suppose Morton had doubled its sales as well as its inventories, accounts receivable, and common equity during 2010. How would that information affect the validity of your ratio analysis?

Morton Chip Company: Balance Sheet as of December 31, 2010 (Thousands of Dollars)

Morton Chip Company: Income Statement for Year Ended December 31, 2010 (Thousands ofDollars)

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Accounts payable Notes payable Other current liabilities Total current liabilities Long-temm debt Common equity Total liabilities and equity $ 77,500 Cash Receivables Inventories Total current assets Net fixed assets $129,000 84,000 117,000 $330,000 256,500 336,000 241,500 S655,000 292,500 361,000 $947,500 Total assets assets $947,500