(Financial statement analysis) Carson Electronics' management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheets and income statements for the two firms are found here: B a. Calculate the following ratios for both Carson and BGT: Current ratio Times interest earned Inventory turnover Total asset turnover Operating profit margin Operating return on assets Debt ratio Average collection period Fixed asset turnover Return on equity b. Analyze the differences you observe between the two firms. Comment on what you view as weaknesses in the performance of Carson as compared to BGT that Carson's management might focus on to improve its operations. Cash Accounts receivable Inventories Current assets Net fixed assets Carson Electronics, Inc. Balance Sheet ($000) $2,030 4,500 1,460 $7,990 15,970 $23,960 BGT Electronics, Inc. Balance Sheet ($000) $1,480 6,010 2,540 $10,030 25,050 Total assets $35,080 $2,490 970 Accounts payable Accrued expenses Short-term notes payable Current liabilities Long-term debt Owners' equity Total liabilities and owners' equity 3,470 $6,930 7,970 9,060 $4,970 1,520 1,510 $8,000 4,040 23,040 $35,080 $23,960 Net sales (all credit) Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Income taxes (35%) Carson Electronics, Inc. Income Statement ($000) $48,050 (35,980) $12,070 (8,020) $4,050 (1,180) $2,870 (1,005) $1,865 BGT Electronics, Inc. Income Statement ($000) $70,020 (42,050) $27,970 (11,950) $16,020 (520) $15,500 (5,425) Net income $10,075 (Financial statement analysis) Carson Electronics' management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheets and income statements for the two firms are found here: B a. Calculate the following ratios for both Carson and BGT: Current ratio Times interest earned Inventory turnover Total asset turnover Operating profit margin Operating return on assets Debt ratio Average collection period Fixed asset turnover Return on equity b. Analyze the differences you observe between the two firms. Comment on what you view as weaknesses in the performance of Carson as compared to BGT that Carson's management might focus on to improve its operations. Cash Accounts receivable Inventories Current assets Net fixed assets Carson Electronics, Inc. Balance Sheet ($000) $2,030 4,500 1,460 $7,990 15,970 $23,960 BGT Electronics, Inc. Balance Sheet ($000) $1,480 6,010 2,540 $10,030 25,050 Total assets $35,080 $2,490 970 Accounts payable Accrued expenses Short-term notes payable Current liabilities Long-term debt Owners' equity Total liabilities and owners' equity 3,470 $6,930 7,970 9,060 $4,970 1,520 1,510 $8,000 4,040 23,040 $35,080 $23,960 Net sales (all credit) Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Income taxes (35%) Carson Electronics, Inc. Income Statement ($000) $48,050 (35,980) $12,070 (8,020) $4,050 (1,180) $2,870 (1,005) $1,865 BGT Electronics, Inc. Income Statement ($000) $70,020 (42,050) $27,970 (11,950) $16,020 (520) $15,500 (5,425) Net income $10,075
