1. Financial statement analysis

You have been provided the following comparative balance sheet and income

statement. Please calculate the financial ratios required for Year 2008, rounding to two decimal places.

1. Profit Margin
2. Return on Assets
3. Current Ratio
4. Debt to Assets
5. Time Interest Earned
6. Inventory turnover

K. L. Widget Company Income Statement For the Year Ended, December 31, 2008 Sales $150,000 Expenses Cost of goods sold Operating expenses Interest Income tax $ 80,000 30,000 8,000 13,000 Total expenses $131,000 Net operating income $ 19,000 Other Income: Gain on sale of equipment 10,000 Net income $29,000 Note: All sales were made on credit. K. L. Widget Company Balance Sheet Dec. 31, 2008 Dec. 31, 2007 Assets Current Cash Accounts receivable Finished goods Materials inventory $ 95,000 60,000 25,000 110,000 $ 78,000 82,000 50,000 80,000 Total current assets $290,000 $290,000 Plant and Equipment Plant and equipment Allowance for deprecation Total plant and equipment $100,000 20.000 95,000 18.000 $80,000 $ 77,000 $367,000 Total assets $370,000 Liabilities Current Accounts payable Notes payable Taxes payable $150,000 20,000 8,000 $ 60,000 30,000 13,000 $ 78,000 $103,000 Total current Long term: Bonds payable Total Liabilities $150,000 $ 90,000 $250,000 $190,000 Stockholders' Equity Common stock Retained earnings $100,000 12,000 $120,000 44,000 $112,000 $164,000 Total liabilities and stockholders' equity $370,000 $367,000 The company common stock has a market value per share of $20. The company has 10,000 shares of stock outstanding