Finance Homework... Shannon Rantz SR Le Search Help ert Draw Design Layout References Mailings Review View Problem 2 pages 57-64 75-78 Medical Equipment Better (B) or Wene w Arr: Given the income statement and balance sheet for Medical Equipment Corporation, compute the ratios that are also shown for the industry were for Indicate whether Medical Equipment Corporation is better or worse than the industry average (SHOW YOUR WORK Income Statement Returns 16.04 $4,500,000 3.000 DOO $191,70 387,800 $1.163.470 52.064.220 here to search Problem 2 (See pages 57-64 and 75-78) Given the income statement and balance sheet for Medical Equipment Corporation, compute the ratios that are also shown for the industry average. For each ratio, indicate whether Medical Equipment Corporation is better (B) or worse (W) than the industry average. (SHOW YOUR WORK) Income Statement Sales (all credit) Less: Cost of goods sold Gross profit Less: Selling and administrative expenses Operating profit (EBIT) Less: Interest expense Earnings before taxes (EBT) Less taxes (25%) Earnings after taxes (EAT) *Note: Selling and administrative expenses include $60,000 in lease payments $4,500,000 3,000,000 $1,500,000 1,050,000 $450,000 56,250 $393,750 98,438 $295,312 Balance Sheet Cash Accounts receivable (net) Inventory Total current assets Net plant and equipment Total Assets Current liabilities Long-term liabilities Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $255,050 493,150 250,000 $998,200 1,066020 $2,064,220 450,400 450,350 900,750 387,800 775,670 $1,163.470 $2,064,220 Medical Equipment Corporation Better (B) or Worse (W) Industry Average 10.0% 16.0% 28% 45 days Ratio Profit margin Return on assets Return on equity Average collection period Inventory turnover Total asset turnover Current ratio Quick ratio Debt to total assets Times interest earned 12x 1.8x 1.7 1.1 0.40 6.5x