3. (8 points) H. Corporation is a wholesaler of scuba gear. During 2004, H20 expanded its retail business by adding over 50 dive shops. The following information is obtained from the comparative financial statements included in the company's 2004 annual report (all amounts are in thousands): Dec. 31.2004 Dec 31, 2003 Total liabilities $55,000 $24,000 Total stockholders' equity 35,000 22,000 Total assets 90,000 46,000 FOR THE FISCAL YEARS ENDED Dec. 31 2004 2003 Net Sales $175,000 $123,000 Gross Margin $90,000 $37,000 Depreciation expense $20,000 $ 6,000 Interest expense 11.000 4,000 Income tax expense 25,000 15,000 Net income 34,000 12,000 1. Using the information provided above, compute the following for 2004 and 2003: A. Debt Ratio 2004 2003 B. Times interest carned ratio 2004 2003 2. 2. Comment briefly on the company's solvency between 2003 and 2004 based on your ratio calculations in part 1. 3. Using the information provided above, compute the following for the years indicated below: A Profit Margin% 2004 B Retum on Assets 2004