1. a.From the balance sheet and income statement of Sam's Paint and Drywall, determine the following ratios:

(1) Current

(2) Inventory turnover

(3) Profit to sales

(4) Return on investment

(5) Total debt to equity

b.From Dun and Bradstreet's Key Business Ratios on industry norms, evaluate each of the above ratios.

Sam's Paint and Drywall

Dec. 31 2018

(In thousands of dollars)

AssetsLiabilities and Net Worth

Cash12Accounts Payable15

Inventory41Notes Payable-Bank 4

Accounts Receivable18Other20

Total Current Assets71Total Current Liabilities39

Fixed AssetsLong Term Liabilities41

Vehicles 10

Equipment 15

Building22

Land23Total Owner's Equity61

Total Fixed70

Total Assets141Total Liability and Net worth 141

Income Statement

Dec. 31, 2018

(In thousands of dollars)

Sales280

Less Cost of Goods Sold186

Gross Margin on Sales 94

Less Operating Expenses 81

Net profit (before taxes) 13

Dun and Bradstreet's Key Business Ratios on industry norms

Current Ratio: The Dunn & Bradstreet (D&B) ratio is 2.7.

Inventory Turnover: The D&B average is 6.9.

Profit to sales: The D&B average is 3.5%.

Return on Investment: The D&B average is 21%.

Debt to Equity: The D&B average is 4.3 to 1.