1.The Terry Furniture Company, a manufacturer and wholesaler of high-quality home furnishings, has been experiencing low profitability in recent years. As a result, the board of directors has replaced the president of the firm with a new president, Helen Adams, who has asked you to make an analysis of the firm's financial position. The most recent industry average ratios, and Terry's financial statements, are as follows:

Terry Furniture Company: Balance Sheet as of December 31, 2018

Cash$45 Accounts payable$45

Account receivable 33 Notes payable 45

Not receivables 66 other current liabilities 21

Inventories 159 Total current liabilities $111

Total current assets $303 Long-term debt 24

Total liabilities $135

Gross fixed assets 225

Less depreciation 78 Common stock 114

Net fixed assets $147 Retained earnings 201

Total stockholders' equity $315

Total assets $450 Total liabilities and equity $450

Terry Furniture Company: Income Statement for Year Ended December 31, 2018

Net sales $795.0

Cost of goods sold 660.0

Gross profit $135.0

Selling expenses 73.5

EBITDA $ 61.5

Depreciation expense 12.0

Earnings before interest and taxes (EBIT) $ 49.5

Interest expense 4.5

Earnings before taxes (EBT) $ 45.0

Taxes (40%) 18.0

Net income $ 27.0

INSTRUACTION: Calculate the following ratios and interpret the result (0.75 pts. each)

A.Current ratio F.Fixed assets turnover

B.Debt ratio G.Total assets turnover

C.Times interest earned H. Profit margin on sales

D.Return on total assetsI. Return on common equity

E.Inventory turnover J.Days sales outstanding a