Cross-sectional ratio analysis Use the financial statements for Fox Manufacturing Company for the year ended December 31, 2015, along with the industry average ratios, to:

a. Prepare and interpret a complete ratio analysis of the firm's 2015 operations.

b. Summarize your findings and make recommendations.

Fox Manufacturing Company Balance Sheet

December 31, 2015

Assets

Cash

$15,200

Marketable securities

7000

Accounts receivable

34300

Inventories

81900

Total current assets

$138,400

Net fixed assets

275000

Total assets

$413,400

Liabilities and Stockholders' Equity

Accounts payable

$56,700

Notes payable

13500

Accruals

4600

Total current liabilities

$74,800

Long-term debt

$155,800

Common stock equity (20,000 shares outstanding)

$110,200

Retained earnings

72600

Total stockholders' equity

$182,800

Total liabilities and stockholders' equity

for the Year Ended December 31, 2015
Sales revenue	$603,000
Less: Cost of goods sold	464000
Gross profits	$139,000
Less: Operating expenses
General and administrative expenses	$29,500
Depreciation expense	29900
Total operating expense	59400
Operating profits	$79,600
Less: Interest expense	10100
Net profits before taxes	$69,500
Less: Taxes	27000
Net profits after taxes (earnings available for common stockholders)	$42,500
Earnings per share (EPS)	$2.03

$413,400

Ratio Current ratio Quick ratio Inventory turnover* Average collection period Total asset turnover Debt ratio Times interest eamed Gross profit margin Operating profit margin Net profit margin Return on total assets (ROA) Return on common equity (ROE) Earnings per share (EPS) "Based on a 365-day year and on end-of-year figures Industry average, 2015 2.38 0.90 4.54 times 36.0 days 0.99 0.30 12.2 0.192 0.136 0.094 0.090 0.157 $3.05