Compare the performance of S&S Air to the industry. For each ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an inventory ratio calculated by inventory divided by current liabilities. How do you think S&S Air's ratio would compare to the industry average? Calculate the internal growth rate and sustainable growth rate for S&S Air. What do these numbers mean?

S&S AIR, INC. 2016 Income Statement Sales Cost of goods sold Other expenses Depreciation EBIT Interest Taxable income Taxes (40%) Net income Dividends Additions to retained earnings $24,092,400 17,982,000 2,878,800 786,000 $ 2,445,600 434.400 $ 2,011,200 804,480 $ 1,206,720 $246,000 960,720 S&S AIR, INC. 2016 Balance Sheet Assets Current assets Cash $ 438,048 Accounts receivable 1,841,616 Inventory 1,486,200 Total current assets Fixed assets Net plant and $14,778,816 equipment Liabilities and Equity Current liabilities Accounts payable $ 858,816 Notes payable 1,735,680 Total current liabilities $ 2,594,496 $ 4,590,000 Long-term debt Shareholder equity Common stock Retained earnings Total equity Total liabilities and equity $ 180,000 $11, 180, 184 $11,360,184 $18,544,680 Total assets $18,544,680 Light Airplane Industry Ratios Lower Quartile Median Upper Quartile 1.43 .84 .21 .85 1.89 1.05 .39 1.28 10.89 11.51 Current ratio Quick ratio Cash ratio Total asset turnover Inventory turnover Receivables turnover Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Profit margin Return on assets Return on equity .50 .64 .08 .68 4.89 6.27 .31 .58 1.58 5.18 5.84 4.05% 6.05% 9.93% .61 6.15 9.82 .52 1.08 2.08 8.06 8.43 5.15% 10.53% 16.54% 1.56 2.56 9.83 10.27 6.47% 13.21% 26.15% S&S AIR, INC. 2016 Income Statement Sales Cost of goods sold Other expenses Depreciation EBIT Interest Taxable income Taxes (40%) Net income Dividends Additions to retained earnings $24,092,400 17,982,000 2,878,800 786,000 $ 2,445,600 434.400 $ 2,011,200 804,480 $ 1,206,720 $246,000 960,720 S&S AIR, INC. 2016 Balance Sheet Assets Current assets Cash $ 438,048 Accounts receivable 1,841,616 Inventory 1,486,200 Total current assets Fixed assets Net plant and $14,778,816 equipment Liabilities and Equity Current liabilities Accounts payable $ 858,816 Notes payable 1,735,680 Total current liabilities $ 2,594,496 $ 4,590,000 Long-term debt Shareholder equity Common stock Retained earnings Total equity Total liabilities and equity $ 180,000 $11, 180, 184 $11,360,184 $18,544,680 Total assets $18,544,680 Light Airplane Industry Ratios Lower Quartile Median Upper Quartile 1.43 .84 .21 .85 1.89 1.05 .39 1.28 10.89 11.51 Current ratio Quick ratio Cash ratio Total asset turnover Inventory turnover Receivables turnover Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Profit margin Return on assets Return on equity .50 .64 .08 .68 4.89 6.27 .31 .58 1.58 5.18 5.84 4.05% 6.05% 9.93% .61 6.15 9.82 .52 1.08 2.08 8.06 8.43 5.15% 10.53% 16.54% 1.56 2.56 9.83 10.27 6.47% 13.21% 26.15%