$160,000 106,000 $54,000 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 $16,000 10,000 1.000 10,000 $37,000 $17,000 6,100 $10.900 4,360 $6,540 $500 Zach Industries Balance Sheet December 31, 2015 Assets Cash Marketable securities 1,000 Accounts receivable 25,000 Inventories 45,500 Total current assets $72,000 Land $26,000 Buildings and equipment 90,000 Less: Accumulated depreciation 38,000 Net fixed assets $78,000 Total assets $150,000 Liabilities and Stockholders' Equity Accounts payable $22,000 Notes payable 47,000 Total current liabilities $69,000 Long-term debt $22,950 Common stock* $31,500 Retained earnings $26,550 Total liabilities and stockholders' equity $150,000 *The firm's 3,000 outstanding shares of common stock closed 2015 at a price of $25 per share. Industry average Actual 2014 Actual 2015 1.8 1.84 0.78 2.591 37.5 days 36.5 days 65.0% 67.0% 0.7 2.5 A 1 Ratio 2 Current ratio 3 Quick ratio 4 Inventory turnover* 5 Average collection period* 6 Debt ratio 7 Times interest earned ratio 8 Gross profit margin 9 Net profit margin 10 Return on total assets 11 Return on common equtiy 12 Market/book ratio 13 3.8 38% 3.5% 4.0% 9.5% 40% 3.6% 4.0% 8.0% 1.1 1.2 Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2015, follow a. Use the financial statements to complete the following table Assume the industry averages given in the table are applicable for both 2014 and 2015. a. The current ratio is . (Round to two decimal places.) The quick ratio is (Round to two decimal places.) The inventory turnover is . (Round to two decimal places.) The average collection period is days. (Round to one decimal place.) The debt ratio is %. (Round to one decimal place.) The times interest earned ratio is (Round to one decimal place.) The gross profit margin is % (Round to one decimal place.) The net profit margin is %. (Round to one decimal place.) The return on assets is %. (Round to one decimal place) The return on common equity is %. (Round to one decimal place.) The market/book value is . (Round to two decimal places.)