Higginbotham, INC

Balance Sheet ($000)

Assets	Liabilities and Stockholders Equity
Cash $ 1,500 Marketable Securities 2,500 Accounts Receivable 15,000 Inventory 33,000 Tot. Curr. Assets $52,000 Fixed Assets (net) 35,000 Total Assets $87,000	Accounts Payable $12,500 Notes Payable 12,500 Tot. Current Liab. $25,000 Long-term Debt 22,000 Total Liabilities $47,000 Common Stock (par) 5,000 Paid-in Capital 18,000 Retained Earnings 17,000 Total Stock Equity $40,000 Tot Liab. And Stockholder Equity $87,000

Higginbotham, INC

Income Statement ($000)

Sales (all on credit) $130,000

Cost of Good Sold 103,000

Gross Margin 27,000

Operating Expenses 16,000

Earnings before Interest and Taxes 11,000

Interest Expense 3,000

Earnings before Taxes 8,000

Taxes 3,000

Earnings After Taxes $ 5,000

Other Information:

Stock Price (Market Price) $9.50

Book Value per Share $8.00

Number of Shares 5,000,000

Use the Balance Sheet and Income Statement of Higginbotham, INC to answer the following:

1. Calculate the following liquidity ratios.

1. 1. Current Ratio
   2. Quick Ratio
2. Calculate the following Activity Ratios.
   1. Average Collection Period
   2. Inventory Turnover
   3. Fixed Asset Turnover
   4. Total Asset Turnover
3. Calculate the following financial leverage ratios.
   1. Debt ratio
   2. Debt-to-equity ratio
   3. Times Interest Earned ratio
4. Calculate the following profitability ratios.
   1. Gross Profit Margin
   2. Net Profit Margin
   3. Return on investment
   4. Return on Stockholders equity
5. Calculate the following market-based ratios
   1. Price-to-earnings ratio
   2. Market price to book ratio

6. Express the return on stockholders equity ratio as a function of the net profit margin, total asset turnover, and equity multiplier.