P3–24 Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2015, follow.

a. Use the preceding financial statements to complete the following table. Assume that the industry averages given in the table are applicable for both 2014 and 2015.

b. Analyze Zach Industries’ financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company’s overall financial condition

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Zach Industries Income Statement for the Year Ended December 31, 2015 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes Net profits after taxes $160,000 106,000 $ 54,000 $ 16,000 10,000 1,000 10,000 $ 37,000 $ 17,000 6,100 $ 10,900 4,360 $ 6,540