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.

a.Calculate the following ratios for both Carson and BGT:

Carson's current ratio is $________(Round to two decimal places.)

Carson Electronics, Inc.

Balance Sheet ($000)

BGT Electronics, Inc.

Balance Sheet ($000)

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Cash

$2,010

$ 1,550

Accounts receivable

4,450

6,030

Inventories

1,540

2,480

Current assets

$ 8,000

$10,060

Net fixed assets

15,950

24,950

Total assets

$23,950

$35,010

Accounts payable

$2,460

$ 5,020

Accrued expenses

1,010

1,550

Short-term notes payable

3,470

1,520

Current liabilities

$ 6,940

$8,090

Long-term debt

7,980

3,990

Owners' equity

9,030

22,930

Total liabilities and owners' equity

$23,950

$35,010

Carson Electronics, Inc.

Income Statement ($000)

BGT Electronics, Inc.

Income Statement ($000)

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Net sales (all credit)

$ 47 comma 950$47,950

$ 69 comma 990$69,990

Cost of goods sold

( 36 comma 020 )(36,020)

( 42 comma 050 )(42,050)

Gross profit

$ 11 comma 930$11,930

$ 27 comma 940$27,940

Operating expenses

( 7 comma 950 )(7,950)

( 12 comma 040 )(12,040)

Net operating income

$ 3 comma 980$3,980

$ 15 comma 900$15,900

Interest expense

( 1,160)

(520)

Earnings before taxes

$2,820

$15,380

Income taxes

(40 %40%)

(1,128)

(6,152)

Net income

$1,692

$9,228

Carson Electronics, Inc.

Income Statement ($000)

BGT Electronics, Inc.

Income Statement ($000)

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Net sales (all credit)

$47,950

$ 69,990

Cost of goods sold

( 36,020)

( 42,050)

Gross profit

$11,930

$27,940

Operating expenses

( 7,950)

( 12,040)

Net operating income

$3,980

$ 15,900

Interest expense

( 1,160)

( 520)

Earnings before taxes

$2,820

$15,380

Income taxes

(40 %40%)

( 1,128)

( 6,152)

Net income

$1,692

$ 9,228