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.6.(Working with an income statement and balance sheet) Prepare a balance sheet and 3-6 income statement for the Warner Company from the following scrambled list of items a. Prepare a common-sized income statement and common-sized balance sheet Interpret your findings. $66,000 225,000 Depreciation expense Cash 334,000 573,000 102,000 79,000 895,000 75,000 153,000 4,750 7,900 289,000 297,000 99,300 Long-term debt Sales Accounts payable Marketing, and general, and administrative expenses Buildings and equipment otes payable Acounts receivable Interest expense Accrued expenses Common stock Cost of goods sold Inventory Taxes 50,500 263,000 14,500 53,000 262,900 Accumulated depreciation Prepaid expenses Taxes payable Retained earnings The chief financial officer for Artz has acquired industry averages for the following ratios: Current ratio 3.0 1.50 40.0 70.2 12.5% 80% 1.6 3.1 330% Acid-test ratio Days in receivables Days in inventories Operating return on assets Operating profit margin Total asset turnover Fixed-asset turnover Debt ratio Times interest earned 6.0 11.0% Return on equity a. Compute the ratios listed above for Artz. b. Compared to the industry: 1. How liquid is the firm? 2. Are its managers generating an attractive operating profit on the firm's assets? 3. How is the firm financing its assets? 4. Are its managers generating a good return on equity? b. What does Economt $ 4,500 (2.800) $1,700 4-17 (Ratio analysis) Artz, Inc.'s financial statements for 2015 are sho Sales Cost of goods sold Gross profits Operating expenses $(1,000) (200) $(1200) $ 500 Marketing, general, and administrative expenses Depreciation expense Total operating expenses Operating profits Interest expense $ 440 Earnings before taxes (taxa ble income) Income taxes Net Income Liabilities (Debt) and Equity s 500 600 Accounts receivable Inventories $2,000 2,100 Total current assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets Liabilities (Debt) and Equity Accounts payable Short-term notes payable Total current liabilities Long-term debt Total liabilities 500 800 1,200 500 Common stock (par and paid-in capital) Retained earnings Total common equity Total liabilities and equity