a. The current ratio is 1.84". (Round to two decimal places.) Fox Manufacturing's current ratio is worse than average. (Select from the drop-down menu.) The quick ratio is 0.74. (Round to two decimal places.) Fox Manufacturing's quick ratio is worse than average. (Select from the drop-down menu.) The inventory turnover is 5.56. (Round to two decimal places.) Fox Manufacturing's inventory turnover is better than average. (Select from the drop-down menu.) The average collection period is 20.6. (Round to one decimal place.) Fox Manufacturing's average collection period is better than average. (Select from the drop-down menu.) The total asset turnover is 1.45. (Round to two decimal places.) Fox Manufacturing's total asset turnover is better than average. (Select from the drop-down menu.) The debt ratio is 0.56. (Round to two decimal places.) Fox Manufacturing's debt ratio is worse than average. (Select from the drop-down menu.) The times interest earned ratio is 8.0. (Round to one decimal place.) Fox Manufacturing's times interest earned ratio is worse than average. (Select from the drop-down menu.) The gross profit margin is 0.229'. (Round to three decimal places.) Fox Manufacturing's gross profit margin is better than average. (Select from the drop-down menu.) The operating profit margin is 0.128". (Round to three decimal places.) Fox Manufacturing's operating profit margin is worse than average. (Select from the drop-down menu.) The net profit margin is 0.088". (Round to three decimal places.) Fox Manufacturing's net profit margin is worse than average. (Select from the drop-down menu.) The return on total assets (ROA) is 0.127'. (Round to three decimal places.) Fox Manufacturing's return on total assets (ROA) is better than average. (Select from the drop-down menu.) The return on common equity (ROE) is 0.287. (Round to three decimal places.) . Fox Manufacturing's return on common equity (ROE) is better than average. (Select from the drop-down menu.) Fox Manufacturing's earnings per share is worse than average. (Select from the drop-down menu.) b. Summarize your findings and make recommendations. (Select from the drop-down nus.) The firm is more highly leveraged than the average firm in its industry and, therefore, has more financial risk. The of the firm is lower than Fox Manufacturing Company needs improvement in its ratios and possibly a reduction in its total average but is enhanced by the use of debt in the capital structure, resulting in a superior ROE. Fox Manufacturing Company Income Statement for the Year Ended December 31, 2021 Sales revenue $595,000 Less: Cost of goods sold 459,000 Gross profits $136,000 Less: Operating expenses General and administrative expenses $29,800 Depreciation expense 30,200 Total operating expense 60,000 Operating profits $76,000 Less: Interest expense 9,500 Net profits before taxes $66,500 Less: Taxes 14,200 Net profits after taxes (earnings available for common stockholders) $52,300 Earnings per share (EPS) $2.56 $15,500 6,500 33,600 82,500 $138,100 273,000 $411,100 Fox Manufacturing Company Balance Sheet December 31, 2021 Assets Cash Marketable securities Accounts receivable Inventories Total current assets Net fixed assets Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debt Common stock equity (20,000 shares outstanding) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $57,000 13,100 5,000 $75,100 $153,500 $110,000 72,500 $182,500 $411,100 Ratio Industry average, 2021 Current ratio 2.40 Quick ratio 0.93 Inventory turnover* 4.47 times Average collection period* 35.7 days Total asset turnover 1.04 Debt ratio 0.27 Times interest earned 12.4 Gross profit margin 0.194 Operating profit margin 0.130 Net profit margin 0.116 Return on total assets (ROA) 0.119 eturn on common equity (ROE) 0.210 Earnings per share (EPS) $3.54 *Based on a 365-day year and on end-of-year figures