Chapter 1 Activity 2: Understanding financial statements Required? 1. Identify to which industry the following financial statements represent? 2. Compute the following ratios when it is applicable, to support your discussion. (a) Profit margin = NI/Net sales (b) Leverage ratio = Long-term liability/Total assets (c) Fixed asset ratio = Total foxed assets/rotal Assets (d) Asset turnover ratio = Sales/Total Assets 2 Company C Equity Common stocks and paid-up in 55.543 excess capital \begin{tabular}{lc} Retained earnings & 84,539 \\ \hline Treasury stock & (1,837) \\ \hline Total Equity & 138,245 \\ \hline Total liabilities & Equities & 420,549 \\ \hline \end{tabular} 3