7 Part 1 of 2 Required information [The following information applies to the questions displayed below.] Williams Company is a manufacturer of auto parts having the following financial statements for 2018-2019. 10 points Cash Skipped eBook Print Accounts receivable Inventory Balance Sheet December 31 2019 2018 $ 260,000 $ 135,000 150,000 385,000 225,000 175,000 Total current assets Long-lived assets Total assets Current liabilities Long-term debt Shareholders' equity Total debt and equity $ 795,000 $ 535,000 1,500,000 $2,035,000 175,000 800,000 1,640,000 $2,435,000 200,000 900,000 1,335,000 1,060,000 $2,435,000 $2,035,000 References Sales Income Statement For the years ended December 31 2019 Cost of sales Gross margin Operating expenses* Operating income Taxes Net income 2018 $3,500,000 $3,600,000 2,500,000 2,600,000 1,000,000 1,000,000 500,000 450,000 500,000 550,000 175,000 192,500 $ 325,000 $357,500 Cash Flow from Operations Net income Plus depreciation expense + Decrease (-increase) in accounts receivable and inventory + Increase (-decrease) in current liabilities Cash flow from operations 2019 $ 325,000 60,000 (135,000) 2018 $357,500 50,000 25,000 $ 275,000 $407,500 *Operating expenses include depreciation expense. Additional financial information, including industry averages for 2019, where appropriate, includes: 2019 2018 Industry 2019 Capital expenditures $ 125,000 $ 100,000 Income tax rate Depreciation expense $ 35% 60,000 $ 35% 35.0% 50,000 Dividends $ 50,000 $ Year-end stock price $ 2.25 $ Number of outstanding shares 1,800,000 50,000 2.75 1,800,000 25.00 Sales multiplier 1.50 Free cash flow multiplier 18.00 Earnings multiplier 9.00 Cost of capital 5.0% 5.0% Accounts receivable turnover 11.10 Current ratio Inventory turnover Quick ratio Cash flow from operations ratio Free cash flow ratio Gross margin percentage Return on assets (net book value) Return on equity 10.50 2.30 1.90 1.20 1.10 30.0% 20.0% 30.0%