5.5 Eleanors Computers is a retailer of computer products. Using the financial data provided, complete the financial ratio calculations for 2016. Advise management of any ratios that indicate potential problems and provide an explanation of possible causes of the problems.

You are required to calculate ratios for 2016. Please complete these calculations in Excel. Please provide the formulas for each ratio. I will deduct points if you do not provide the formulas. Additionally, you are to advise management of any ratios that indicate a potential problems and provide an explanation of possible causes of the problems.This section should not be lengthy. You do not have enough information to conduct an in-depth analysis. Choose at least five (5) ratios to comment on. Complete this requirement in a Word document. Upload both files to the link provided here.

				Industry Averages
Financial Ratios	2014	2015	2016	2016
Current ratio	1.71X	1.65X		1.70X
Quick ratio	0.92X	0.89X		0.95X
Average collection period	60 days	60 days		65 days
Inventory turnover	4.20X	3.90X		4.50X
Fixed asset turnover	3.20X	3.33X		3.00X
Total asset turnover	1.40X	1.35X		1.37X
Debt ratio	59.20%	61.00%		60.00%
Times interest earned	4.20X	3.70X		4.75X
Gross profit margin	25.00%	23.00%		22.50%
Operating profit margin	12.50%	12.70%		12.50%
Net profit margin	6.10%	6.00%		6.50%
Return on total assets	8.54%	8.10%		8.91%
Return on equity	20.93%	20.74%		22.28%

Income Statement for Year Ended 12/31/16		Balance Sheet at 12/31/16
Sales	$1,500,000	Cash	$ 125,000
Cost of goods sold	1,200,000	Accounts receivable	275,000
Gross profit	$ 300,000	Inventory	325,000
Operating expenses	100,000	Current assets	$ 725,000
Operating profit	$ 200,000	Fixed assets (net)	$420,000
Interest expense	72,000	Total Assets	$1,145,000
Earnings before tax	128,000	Accounts payable	$ 150,000
Income tax (40%)	51,200	Notes payable	225,000
Net Income	$ 76,800	Accrued liabilities	100,000
		Current liabilities	475,000
		Long-term debt	400,000
		Total liabilities	$ 875,000
		Equity	270,000
		Total liabilities and equity	$1,145,000