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:

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.

Balance Sheet ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Cash	$1,950	$1,450
Accounts receivable	4480	5970
Inventories	1470	2490
Current assets	$7,900	$9,910
Net fixed assets	15970	25030
Total assets	$23,870	$34,940
Accounts payable	$2,490	$4,980
Accrued expenses	1040	1470
Short-term notes payable	3470	1530
Current liabilities	$7,000	$7,980
Long-term debt	7960	4020
Owners' equity	8910	22940
Total liabilities and owners' equity	$23,870	$34,940

Income Statement ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Net sales (all credit)	$48,030	$70,000
Cost of goods sold	(35,960)	(41,980)
Gross profit	$12,070	$28,020
Operating expenses	(7,970)	(12,020)
Net operating income	$4,100	$16,000
Interest expense	(1,100)	(550)
Earnings before taxes	$3,000	$15,450
Income taxes (40%)	(1,200)	(6,180)
Net income	$1,800	$9,270