Assets Cash $ 500 Marketable securities 1,000 Accounts receivable 25,000 Inventories 45,500 Total current assets $ 72,000 Land $ 26,000 Buildings and equipment 90,000 Less: Accumulated depreciation 38,000 Net fixed assets $ 78,000 Total assets $150,000 Liabilities and Stockholders' Equity Accounts payable $ 22,000 Notes payable 47,000 Total current liabilities $ 69,000 Long-term debt 22,950 Common stock 31,500 Retained earnings 26,550 Total liabilities and stockholders' equity $ 150,000 "The firm's 3,000 outstanding shares of common stock closed 2015 at a price of $25 per share. Question 6: The financial statements of ABC Industries for the year ended December 31, 2015 follow Sales revenue $160,000 Less: Cost of goods sold 106,000 Gross profits $ 54,000 Less: Operating expenses Selling expense $ 16,000 General and administrative expenses 10,000 Lease expense 1,000 Depreciation expense 10,000 Total operating expense $ 37,000 Operating profits $ 17,000 Less: Interest expense 6,100 Net profits before taxes $ 10,900 Less: Taxes 4,360 Net profits after taxes $ 6,540 Ratio Industry average Actual 2014 Actual 2015 Current ratio 1.80 1.84 Quick ratio 0.70 0.78 Inventory turnover 2.50 2.59 Average collection period 37,5 days 36.5 days Debt ratio 65% 67% Times interest earned ratio 3.8 4.0 Gross profit margin 38% 40% Net profit margin 3.6% Return on total assets 4.0% 4.0% Return on common equity 9.5% 8.0% a. Use the preceding financial statements to calculate 2015's ratios. Assume that the industry averages given in the table are applicable for both 2014 and 2015. b. Analyze ABC Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, and (4) profitability on a time series and cross section basis. Summarize the company's overall financial condition.