6 Points Question 6 Emery Corporation is a machinery manufacturing company located in Morganton, NC, USA. The company's management wanted to evaluate their financial performance by applying key financial ratios. a) Using the latest Financial statements (Table 1) calculate the following performance measures: I 1. Current Ratio 2. Average Collection Period 3. Operating Return on Assets 4 Debt Ratio 5. Price Earnings Ratio b) Interpret the results by comparing it with the industry average (Table 2) Table w Your RO ry . 40 Table 1: Financial Statements Emery Corporation Financial Statements For the year ended December 31, 2017 Income Statement Balance Sheet Assets: Cash Accounts receivable Inventory Net fixed assets Total assets I $230,000 400,000 350,000 2.250.000 $3.430,000 Sales (all credit) Cost of goods sold Operating expense Interest expense Income taxes Net income $9,000,000 (4.550,000) (3,150,000) (200,000) (430,000) S670,000 Liabilities and ownersteg Accounts payable Long-term Notes payable Long-term debt $200,000 450.000 1,080.000 Owners' Equity 1,700,000 Total liabilities and owner's equity $3,430,000 Market price per share = 35 Earnings Per Share 2.20 Table 2: Industry Average Industry Average 6.4 % 14 Days Ratio Current Ratio Average Collection Period Operating Retum on Assets Debt Ratio Price Earnings Ratio 4094 48.5% 16.3 x