36. Using Ratios to Evaluate a Business Purchase Overtake Financial Group is a large corporation whose sole activity is the acquisition of quality subsidiary companies. You are a senior analyst for Overtake, and your manager has just come to you with the following financial statements for Burning Corn Company, an ethanol producing firm based in Nebraska, which is currently trading at 500 per share. He wants you to analyze the company and give a recommendation on whether or not to sub- mit a bid for Burning Corn. Burning Corn Company Comparative Balance Sheet at December 31 2013 2012 Cash * 10,000 20,000 Accounts receivable 30,000 45,000 Inventory 1,05,000 75,000 Prepaid insurance 5,000 15,000 Total current assets 1,50,000 1,55,000 Property and equipment 3,75,000 3,25,000 Accumulated depreciation 55,000 40,000 Total property and equipment 3,20,000 2,85,000 Total assets 24,70,000 $4,40,000 Accounts payable 360,000 * 50,000 Notes payable 25,000 25,000 Total current liabilities 85,000 5,000 Bonds payable 2,80,000 2,80,000 Total liabilities 3,65,000 3,55,000 Common stock (Avg. 100,000 shares outstanding) 75,000 75,000 Retained earnings 30,000 10,000 Total stockholders' equity 1,05,000 85,000 Total liabilities and stockholders' equity 34,70,000 34,40,000 Burning Corn Company 2013 Income Statement Sales $2,50,000 Cost of goods sold 1,50,000 Gross profit 31,00,000 Administrative expenses 25,000 Depreciation expense 15,000 Total operating expenses 40,000 Operating income * 60,000 Interest expense 10,000 Income before taxes 50,000 Income tax expense 25,000 Net income 25,000 Required Prepare a brief written analysis of Burning Corn's profitability, liquidity, and solvency. Include a table of calculated ratios and your recommendation on whether Overtake should bid on the company. Round percentages to one decimal point (.e., 12.8%)