2. River Company's inventory management improved in 19D, as evidenced by the higher turnover rate and decrease in the days that inventories were held. As a result, there is less liquidity risk. Further, the company's profitability will benefit by the increased turnover of merchandise. h41 11.5 A condensed balance sheet and other financial data for Alpha Company appear below. ALPHA COMPANY Balance Sheet December 31, 19X1 ASSETS Current Assets $100.000 Plant Assets 140,000 Total Assets $250.000 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities $100,000 Long-Term Liabilities 75.000 Total Liabilities $175.000 Stockholders' Equity 75,000 Total Liabilities and Stockholders' Equity $250.000 Income Statement Date Net Sales $375,000 Interest Expense 4.000 Net Income 22.500 The following account balances existed at December 31, 1980. Total Assets $200,000 Stockholders' Equity, $65.000. The tax rate is 35 percent. Industry norms as of December 31, 19X1 were: Debt-equity ratio 1.75 Profit margin 0.12 Return on total assets 0.15 Return on stockholders' equity 0.30 Total asset turnover 1.71 Calculate and evaluate the following ratios for Alpha Company as of December 31, 1981: (a) Debt-equity ratio (6) Profit margin (c) Return on total assets (d) Return on stockholders' equity (e) Total asset turnover