ABC corporation`s forecasted 2005 financial statement follow, along with some industry average ratio. Calculate ABC 2005 forecasted ratios, compare them with the industry average data, and comment briefly on ABC projected strengths and weaknesses.

ABC Corporation

Balance sheet as on December 31,2005

Cash	72,000
Account receivable	439,000
Inventories	894,000
Total current assest	1,405,000
Fixed assets	431,000
Total assets	1,836,000
Accounts and notes payable	432,000
Accruals	170,000
Total current liabilities	602,000
Long-term Debt	404,290
Common stock	575,000
Retained earnings	254,710
Total liabilities and equity	1,836,000

ABC Corporation

Income Statement For 2005

Sales	4,290,000
Cost of goods sold	3,580,000
Selling,general and administrative expenses	370,320
Depreciation	159,000
Earnings before taxes(EBT)	180,680
Taxes (40%)	72,272
Net income	108,408
Per share data
EPS	4.71
Cash dividend per share	0.95
P/E ratio	5X
Market price (average)	23.57
Number of share outstanding	23,000

Industry Financial Ratio(2004)

Quick ratio	1.0X
Current ratio	2.7 X
Inventory turnover	7.0 X
Days sales outstanding (ACP)	32days
Fixed asset turnover	13.0 X
Total asset turnover	2.6 X
Return on assets	9.1 %
Return on equity	18.2%
Debt ratio	50.0%
Net Profit margin	3.5%
P/E ratio	6.0X
P/cash flow ratio	3.5X

Calculation is based on 365-day year

based on yearly ended