Comprehensive Ratio Analysis

The Jimenez Corporation's forecasted 2016 financial statements follow, along with some industry average ratios.

Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2016

Assets
Cash	$ 74,000
Accounts receivable	426,000
Inventories	880,000
Total current assets	$1,380,000
Fixed assets	429,000
Total assets	$1,809,000
Liabilities and Equity
Accounts payable	$ 333,000
Notes payable	93,000
Accruals	167,000
Total current liabilities	$ 593,000
Long-term debt	404,400
Common stock	575,000
Retained earnings	236,600
Total liabilities and equity	$1,809,000

Jimenez Corporation: Forecasted Income Statement for 2016

Sales	$4,355,000
Cost of goods sold (excluding depreciation)	3,593,000
Selling, general, and administrative expenses	377,810
Depreciation	154,000
Earnings before taxes (EBT)	$ 230,190
Taxes (40%)	92,076
Net income	$ 138,114
Per Share Data
EPS	$ 5.52
Cash dividends per share	$ 0.85
P/E ratio	6.5
Market price (average)	$ 25.33
Number of shares outstanding	25,000
Industry Financial Ratios (2015)*
Quick ratio	1.0
Current ratio	2.7
Inventory turnover**	7.0
Days sales outstanding***	32.0 days
Fixed assets turn over**	13.0
Total assets turnover**	2.6
Return on assets	9.1%
Return on equity	18.2%
Profit margin on sales	3.5%
Debt-to-assets ratio	21.0%
Liabilities-to-assets ratio	50.0%
P/E ratio	6.0
Price/Cash flow ratio	3.5
Market/Book ratio	3.5
*Industry average ratios have been stable for the past 4 years.
**Based on year-end balance sheet figures.
***Calculation is based on a 365-day year.

Calculate Jimenez's 2016 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses. Assume that there are no changes from the prior period to any of the operating balance sheet accounts. Round DSO to the nearest whole number. Round the other ratios to one decimal place. Do not round intermediate calculations.

Ratios	Firm	Industry	Comment
Quick ratio	___	1.0	-Select-StrongWeakItem 2
Current ratio	___	2.7	-Select-StrongWeakItem 4
Inventory turnover	___	7.0	-Select-PoorRichItem 6
Days sales outstanding days	___	32 days	-Select-PoorRichItem 8
Fixed assets turnover	___	13.0	-Select-PoorRichItem 10
Total assets turnover	___	2.6	-Select-PoorRichItem 12
Return on assets	___	9.1%	-Select-BadGoodItem 14
Return on equity	___	18.2%	-Select-BadGoodItem 16
Profit margin on sales	___	3.5%	-Select-BadGoodItem 18
Debt ratio	___	21.0%	-Select-LowHighItem 20
Liabilities-to-assets	___	50.0%	-Select-LowHighItem 22
EPS	$5.52	n.a.	--
Stock Price	$25.33	n.a.	--
P/E ratio	___	6.0	-Select-PoorRichItem 24
P/CF ratio	___	3.5	-Select-PoorRichItem 26
M/B ratio	___	n.a.	--

So, the firm appears to be -Select-badlywellItem 28 managed.