A) The balance sheet and income statement for the J. P. Robard Mfg.

Company are as follows:

Balance Sheet ($000) Cash Accounts receivable Inventories Current assets Net xed assets Total assets Accounts payable Accrued expenses Short-term notes payable Current liabilities Long-term debt Owners' equity Total liabilities and owners' equity Income Statement ($000) Net sales (all credit) Cost of goods sold Gross prot Operating expenses (includes $500 depreciation) Operating income Interest expense Earnings before taxes Income taxes (40%) Net income A) Calculate and interpret the nancial ratios for 2019' corresponding to the industry norms provided as follows: INDUSTRY NORMS Current ratio 1.5: 1 Inventory turnover 3 it Total asset turnover 1 x Operating prot margin 18% Operating income return on investment 18% Debt ratio 60% Average collection period 100 days Fixed asset turnover 1.5 :1 Return on equity 15% 1. Firm Liquidity current ratio = current assets current liabilities average collection period = accounts receivable dailycredit sales 2. Operating Profitability operating income return on investment = operating income total assets operating profit margin = Operating income sales total asset turnover = sales total assets inventory turnover = cost of goods sold inventory fixed assets turnover = sales net fixed assets 3. Financing Decisions debt ratio = = total debt total assets 4. Return on common equity return on common equity =. net income common equitySales Production Month Purchase Wages Selling ($) ($) ($) Overheads Overheads ($) ($) July 90,000 30,000 9,000 7,850 5,580 August 93,500 23,000 9,400 9,300 8,820 September 86,000 48,900 9,900 3,610 9,470 October 78,000 34,560 7,000 3,510 6,880 November 78,500 35,980 18,600 3,400 7,000 December 88,600 37,400 8,000 3,250 7,680