1. Compute the following (all sales are on account; long-term liabilities are owed to the companys bank, terms of sale are net 30 days):

Inventory turnover, Days to sell inventory, Debt-to-equity ratio, Times interest earned

Balance Sheet
	2005	2004	2003
Assets
Cash	12,000	14,000	17,000
Accounts receivable, net	183,000	80,000	60,000
Inventory	142,000	97,000	52,000
Other current assets	5,000	6,000	4,000
Plant and equipment, net	160,000	110,000	70,000
Total assets	502,000	307,000	203,000
Liabilities and Equity
Accounts payable	147,800	49,400	23,000
Federal income tax payable	30,000	14,400	28,000
Long-term liabilities	120,000	73,000	22,400
Common stock, $5 par value	110,000	110,000	80,000
Retained earnings	94,200	60,200	49,600
Total liabilities and equity	502,000	307,000	203,000

Income Statement
	2005	2004	2003
Net Sales	1,680,000	1,245,000	1,050,000
Cost of goods sold	923,000	805,000	512,000
Gross profit	757,000	440,000	538,000
Marketing and administrative costs	670,000	396,700	467,760
Operating Income	87,000	43,300	70,240
Interest cost	12,000	7,300	2,240
Income before income tax	75,000	36,000	68,000
Income tax	30,000	14,400	28,000
Net Income	45,000	21,600	40,000

Statement of Retained Earnings
	2005	2004
Balance, beginning	60,200	49,600
Add: Net income	45,000	21,600
Subtotal	105,200	71,200
Deduct: Dividends paid	11,000	11,000
Balance, ending	94,200	60,200