Eikner, Inc. Income Statements For the Years Ended December 31, 2006-2008 2006 2007 2008 Sales $641,900 $652.000 $654,500 Cost of goods Sold (304,500 (323.700 (339,200 Gross Profit $337,400 $328,300 $315,300 Operating Expenses (154,200 (155,800 (161,900 Operating Income $183,200 $172,500 $153,400 Other Revenue (Expense)** 13,400 (6,400 (1,200 Income before Income Tax $196,600 $166,100 $152,200 Income Tax Expense (78.600 (66,400 (60.900 Net Income $118.000 $ 99.700 S 91.300 *All of the company's sales are on a credit basis. *Includes interest expense of the following amounts: 8,900 (2000); $7,400 (2001); and $7,100 (2002). 2007 2008 $ 9,100 103,300 102,000 1,400 $215,800 201,500 2,600 $419.900 $ 3,700 116,900 89,000 1.700 $211,300 189,400 1,500 $402.200 Eikner, Inc. Balance Sheets December 31, 2006-2008 2006 ASSETS Cash S. 22.000 Accounts Receivable (net) 72,500 Inventory 109,800 Prepaid Expenses 2.500 Total Current Assets $206,800 Property & Equipment (net) 212,000 Other Assets 3,200 Total Assets $422.000 LIABILITIES Accounts Payable $ 51.900 Notes Payable 25,000 Accrued Liabilities 41,100 Total Current Liabilities $118.000 Bonds Payable 100,000 Total Liabilities $218,000 STOCKHOLDERS' EQUITY Common Stock $.50.000 Additional Paid-in Capital 130,000 Retained Earnings 24,000 Total Stockholders' Equity $204,000 Total Liabilities and Stockholders' Equity $422.000 $ 57,200 15,000 35,800 $108,000 80,000 $188,000 $ 50,000 130,000 51.900 $231 900 $419.900 $ 64,900 12,000 7,400 84.300 80,000 $164,300 $ 50,000 130,000 57.900 $237.900 $402.200 a) What is the company's 2008 LT Debt to Equity ratio? b) Operating income as a percentage of sales was highest in which year? c) Which of the following statements is true? Cash has increased (favorable) and accounting receivable has increased. Accounts payable has increased (favorable) Liabilities are decreasing (favorable) Retained earnings is decreasing (favorable)