E2-18. Comprehensive Analysis. Fox Instruments, Inc. is a manufacturer of various medical and dental instruments. Financial statement data for the firm follow: ($ thousands, except per share amount)

2015 Sales revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000

Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,000

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,750

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200

Cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,800 Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07

FOX INSTRUMENTS, INC. Balance Sheets ($ thousands) Dec. 31, 2015 Dec. 31, 2014 Assets

Cash ................................... $ 3,000 $ 2,900

Accounts receivable (net)................... 28,000 28,800

Inventory................................ 64,000 44,000

Total current assets...................... 95,000 75,700

Plant assets (net) ......................... 76,000 67,300

Total assets.............................. $171,000 $143,000

Liabilities and stockholders equity Current liabilities.......................... $ 45,200 $ 39,750

10% Bonds payable....................... 20,000 14,000

Total liabilities .......................... 65,200 53,750

Common stock, $10 par value ............... 40,000 30,000

Retained earnings ........................ 65,800 59,250

Total stockholders equity................. 105,800 89,250

Total liabilities and stockholders equity........ $171,000 $143,000

Required: a. Using the given data, calculate items 1 through 8 for 2015. Compare the performance of Fox Instruments, Inc., with the following industry averages and comment on its operations.

Median Ratios for the Industry

1. Current ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7

2. Quick ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6

3. Average collection period. . . . . . . . . . . . . . . . . . . . 73 days

4. Inventory turnover . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 times

5. Long-term debt to equity ratio . . . . . . . . . . . . . . . . 0.11

6. Return on assets . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9%

7. Return on common stockholders equity. . . . . . . . 10.2%

8. Return on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1%