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d. Suppose Campsey had doubled its sales as well as its inventories, accounts receivable, and common equity during the year 2015. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages.)

Income Statement for Year Ended December 31, 2015 $ 1,607,500 ( 1,353,000) $ 254,500 (143,000) $ 111,500 Sales Cost of goods sold Gross profit Fixed operating expenses except depreciation Earnings before interest, taxes, depreciation, and amortization (EBITDA) Depreciation Earnings before interest and taxes (EBIT) Interest Earnings before taxes (EBT) Taxes (40%) Net income $ ( $ ( $ 41,500) 70,000 24,500) 45,500 18,200) 27,300 Industry Average Ratio Campsey Current ratio Days sales outstanding Inventory turnover Total assets turnover Net profit margin Return on assets (ROA) Return on equity (ROE) Debt ratio 2.0 x 35.0 days 5.6 x 3.0 x 1.2% 3.6% 9.0% 60.6% Income Statement for Year Ended December 31, 2015 $ 1,607,500 ( 1,353,000) $ 254,500 (143,000) $ 111,500 Sales Cost of goods sold Gross profit Fixed operating expenses except depreciation Earnings before interest, taxes, depreciation, and amortization (EBITDA) Depreciation Earnings before interest and taxes (EBIT) Interest Earnings before taxes (EBT) Taxes (40%) Net income $ ( $ ( $ 41,500) 70,000 24,500) 45,500 18,200) 27,300 Industry Average Ratio Campsey Current ratio Days sales outstanding Inventory turnover Total assets turnover Net profit margin Return on assets (ROA) Return on equity (ROE) Debt ratio 2.0 x 35.0 days 5.6 x 3.0 x 1.2% 3.6% 9.0% 60.6%