2a. Gino has supplied you with financial statements for the past three years, reproduced below, and some financial statement ratios calculated by Ginos accountant, Kate Quixote. Unfortunately, Kate ran out of time and didnt get the ratios finished. Compute the missing ratios, being sure to show and label your calculations. (Note: Ginos makes all its sales on credit.)

2b. Gino is wondering how Ginos Hardware is performing financially, especially about the trends in its financial performance. Using Ginos financial ratios, comment on the trends in the companys liquidity, leverage and profitability. [Note that Kate did not compute all the relevant ratios to conduct such an analysis; you may want to compute some more.]

Income Statement 2015 2016 2017 Total Sales Cost of Goods Sold Selling, Gen & Admin Total Operating Expenses Operating Income Interest Income (Expense) Income before taxes Income taxes Net Income 1,237,000 990,000 108,000 1,098,000 139,000 (31,000) 108,000 54,000 54,000 1,375,000 1,111,000 128,000 1,239,000 136,000 (46,000) 90,000 45,000 45,000 1,520,000 1,278,000 146,000 1,424,000 96,000 (56,000) 40,000 20,000 20,000 Balance Sheet 2015 2016 2017 Cash Accounts Receivable Inventory Total Current Assets Property, Plant & Equipment Total Assets 27,000 155,000 310,000 492,000 210,000 702,000 25,000 302,000 335,000 662,000 245,000 907,000 26,000 380,000 377,000 783,000 260,000 1,043,000 Accounts Payable Accrued Liabilities Note Payable to Bank Current Portion of Long-Term Debt Total Current Liabilities Long Term Debt Owners' Equity Total Liabilities and Equity 2015 43,000 70,000 23,000 236,000 230,000 236,000 702,000 2016 54,000 114,000 20,000 301,000 325,000 281,000 907,000 2017 61,000 194,000 19,000 397,000 345,000 301,000 1,043,000 2017 2015 2.08 Selected Ratios Current Ratio Quick Ratio Average collection period Fixed asset turnover Total asset turnover Times interest earned ROE 2016 2.20 1.09 80.17 5.61 1.52 1.02 91.25 5.85 1.46 1.71 6.6% 4.48 22.9% 16.0%