3-8. (Interpreting financials statements and measuring cash flows) Based on the information for T. P. Jarmon Company for the year ended December 31, 2010: a. How much is the firm's net working capital and what is the debt ratio? b. Complete a statement of cash flows for the period. Interpret your results. c. Compute the changes in the balance sheets from 2009 to 2010. What do you learn about T. P. Jarmon from these computations? How do these numbers relate to the statement of cash flows? T. P. Jarmon Company Balance Sheet for 12/31/2009 and 12/31/2010 ASSETS Cash Marketable securities Accounts receivable Inventory Prepaid rent Total current assets Net plant and equipment Total assets 2009 $ 15,000 6,000 42,000 51,000 $ 1.200 $ 115,200 286,000 $ 401,200 2010 $ 14,000 6,200 33,000 84,000 $ 1.100 $ 138,300 270.000 $ 408,300 LIABILITIES AND EQUITY 2009 Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stockholders' equity Total liabilities and equity $ 48,000 6,000 15.000 $69.000 $ 160,000 $ 172.200 $ 401,200 2010 $57,000 5,000 13.000 $75.000 $ 150.000 $ 183.300 $ 408,300 T. P. Jarmon Company Income Statement for the Year Ended 12/31/2010 $ 600,000 460.000 $ 140,000 Sales Less cost of goods sold Gross profit Operating and interest expenses General and administrative $ 30,000 Interest 10,000 Depreciation 30,000 Total operating and interest expenses Earnings before taxes Taxes Net income available to common stockholders Cash dividends Change in retained earnings 70.000 $ 70,000 27.100 $ 42,900 31.800 $ 11,100