Comprehensive Ratio Analysis

Data for Lozano Chip Company and its industry averages follow.

Lozano Chip Company: Balance Sheet as of December 31, 2015 (Thousands of Dollars)

Cash	$ 216,000		Accounts payable	$601,400
Receivables	1,414,000		Notes payable	339,500
Inventories	1,129,000		Other current liabilities	521,000
Total current assets	$2,759,000		Total current liabilities	$1,461,900
Net fixed assets	1,321,000		Long-term debt	1,059,600
			Common equity	1,558,500
Total assets	$4,080,000		Total liabilities and equity	$4,080,000

Lozano Chip Company: Income Statement for Year Ended December 31, 2015 (Thousands of Dollars)

Sales	$7,527,000
Cost of goods sold	6,364,000
Selling, general, and administrative expenses	821,000
Earnings before interest and taxes (EBIT)	$ 342,000
Interest expense	106,500
Earnings before taxes (EBT)	$ 235,500
Federal and state income taxes (40%)	94,200
Net income	$ 141,300

Calculate the indicated ratios for Lozano. Round your answers to two decimal places. Do not round intermediate calculations.

Ratio	Lozano	Industry Average
Current assets/Current liabilities		2.0
Days sales outstanding*	days	35.0 days
COGS/Inventory		6.7
Sales/Fixed assets		12.1
Sales/Total assets		3.0
Net income/Sales	%	1.2%
Net income/Total assets	%	3.6%
Net income/Common equity	%	9.0%
Total debt/Total assets	%	30.0%
Total liabilities/Total assets	%	60.0%
*Calculation is based on a 365-day year.

Construct the extended DuPont equation for both Lozano and the industry. Round your answers to two decimal places. Do not round intermediate calculations.

For the firm, ROE is	%
For the industry, ROE is	%

Outline Lozano's strengths and weaknesses as revealed by your analysis. The input in the box below will not be graded, but may be reviewed and considered by your instructor.