CarsonElectronics' management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheets and income statements for the two firms are found below:

Balance Sheet ($000) Carson Electronics, Inc. BGT Electronics, Inc.

Cash $1,950 $1,450

Accounts receivable 4480 5980

Inventories 1470 2510

Current assets $7,900 $9,940

Net fixed assets 16030 24980

Total assets $23,930 $34,920

Accounts payable $2,470 $4,960

Accrued expenses 1000 1460

Short-term notes payable 3490 1510

Current liabilities $6,960 $7,930

Long-term debt 8010 3980

Owners' equity 8960 23010

Total liabilities and owners' equity $23,930 $34,920

Income Statement ($000) Carson Electronics, Inc. BGT Electronics, Inc.

Net sales (all credit) $47,960 $70,010

Cost of goods sold (36,020) (41,990)

Gross profit $11,940 $28,020

Operating expenses (8,050) (11,990)

Net operating income $3,890 $16,030

Interest expense (1,130) (500)

Earnings before taxes $2,760 $15,530

Income taxes (35%) (966) (5,436)

Net income $1,794 $10,094

a. Calculate the following ratios for both Carson and BGT:

Current ratio

Times interest earned

Inventory turnover

Total asset turnover

Operating profit margin

Operating return on assets

Debt ratio

Average collection period

Fixed asset turnover

Return on equity

b. Analyze the differences you observe between the two firms.Comment on what you view as weaknesses in the performance of Carson as compared to BGT that Carson's management might focus on to improve its operations.

Answers: Please Round to Two Decimal Places