Data for Lozano Chip Company and its industry averages follow.

Lozano Chip Company: Balance Sheet as of December $31,2018($Thousands of Dollars$)$

Cash $ $235,000$ Accounts payable $ $601,866$

Receivables $1,575,000$ Notes payable $326,634$

Inventories $1,135,000$ Other current liabilities $532,000$

Total current assets $$2,945,000$ Total current liabilities $$1,460,500$

Net fixed assets $1,325,000$ Long$-$term debt $1,068,750$

Common equity $1,740,750$

Total assets $$4,270,000$ Total liabilities and equity $$4,270,000$Comprehensive Ratio Analysis

Data for Lozano Chip Company and its industry averages follow.

Lozano Chip Company: Balance Sheet as of December $31,2018($Thousands of Dollars$)$

Lozano Chip Company: Income Statement for Year Ended December $31,2018($Thousands of Dollars$)$

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

Ratio

Current assets$/$Current liabilities

Days sales outstanding$*$

COGS$/$Inventory

Sales$/$Fixed assets

Sales$/$Total assets

Net income$/$Sales

Net income$/$Total assets

Net income$/$Common equity

Total debt$/$Total assets

Total liabilities$/$Total assets

Lozano

$*$Calculation is based on a $365-$day year.

Industry Average

b$.$ Use the extended DuPont equation to calculate ROE for both Lozano and the industry. Do not round intermediate calculations. Round your answers to two decimal places.

For the firm, ROE is

$\%.$

For the industry, ROE is

$\%.$

c$.$ Outline Lozano's strengths and weaknesses as revealed by your analysis.

The firm's days sales outstanding is more than twice as long as the industry average, indicating that the firm should tighten $$ credit or enforce a more $$ stringent collection policy.

The total assets turnover ratio is well

$]$ the industry average so sales should be

l$,$ assets

$,$ or both.

While the company's profit margin is

$]$ than the industry average, its other profitability ratios are

$]$ given the amount of equity and assets.

given the amount of equity and assets.