Answer the following questions:

Calculate the profitability ratios. Comment on net profit margin and return on assets ratios if the industry average for these two ratios are 5 percent and 14 percent, respectively.

Calculate the liquidity ratios. Comment on the companys ability to pay off short-term debts.

Calculate the debt ratios. Would a banker agree to extend a loan? Explain.

Calculate the asset activity ratios. Comment on the firms asset utilization.

Calculate the economic value added (EVA) and the market value added (MVA) for Tentacle Acres, assuming that the firms income tax rate is 35 percent, the weighted average rate of return expected by the suppliers of the firms capital is 10 percent, and the market price of the firms stock is $15. There are 5 million shares outstanding. Comment on your results. What do the EVA and MVA values that you calculated indicate?

The consolidated income statement and consolidated balance sheet of Tentacle Acres Company and Subsidiaries are as follows:

Income Statement (000 dollars)

Sales	$94,001
Cost of Goods Sold	$46,623
Gross Profit	$47,378
Selling and Administrative Expenses	$28,685
Depreciation and R&D Expense (both tax deductible)	$5,752
EBIT	$12,941
Interest Expense	$48
Interest Income	$427
Earnings Before Before Taxes (EBT)	$13,320
Income Tax (	$4,700
Net Income (NI)	$8,620
Earnings per Share	$2

Balance Sheet (000 dollars)

Assets:
Cash	$5,534
Marketable Securities	$952
Accounts Receivable (gross)	$14,956
Less: Allowance for Bad Debts	$211
Accounts Receivable (net)	$14,745
Inventory	$10,733
Prepaid Expenses	$3,234
Plant and Equipment (gross)	$57,340
Less: Accumulated Depreciation	$29,080
Plant and Equipment (net)	$28,260
Land	$1,010
Long-Term Investments	$2,503
Total Assets	$66,971
Liabilities:
Accounts Payable	$3,253
Notes Payable	--
Accrued Expenses	$6,821
Bonds Payable	$2,389
Stockholders Equity:
Common Stock	$8,549
Retained Earnings	$45,959
Total Liabilities and Equity	$66,971