I Normal Heading 2 Title 1 No Spac. Heading 1 Styles Paragraph Problem 2 Given the income statement and balance sheet for ABC Equipment Corporation, compute the ratios that are also shown for the industry average. For each ratio, indicate whether ABC Equipment Corporation is better (B) or worse (W) than the industry average. (SHOW YOUR WORK) Income Statement $4,500,000 Sales (all credit) Less: Cost of goods sold Gross profit Less: Selling and administrative expenses Operating prfit (EBIT) 3,000,000 $1,500,000 1,050,000 $450,000 Less: Interest expense 56,250 Earnings before taxes (EBT) Less taxes (25%) Earnings after taxes (EAT) *Nota Selling and administrative expenses include S60,000 in lease payments $393,750 98,438 $295,312 Balance Sheet Cash $255,050 Accounts receivable (net) Inventory 493,150 250,000 Total current assets $998,200 Net plant and equipment 1.066020 Total Assets $2.064.220 40 ort se Homework Ch 2 Word Tell me what you want to do Help View Review Mailings ces AaBbCcD AaBbCcDc AaBbC Aa 1 No Spac. Heading 1 Aa - 1 Normal Paragraph $2,064,220 Total Assets 450,400 Current liabilities 450,350 Long-term liabilities Total liabilities 900,750 387,800 Common stock 775,670 Retained earnings $1,163.470 $2,064,220 Total stockholders' equity Total liabilities and stockholders' equity op O Tell me what you want to do Help Review View Mailings AaBbCcD AaBbCcDc AaBbC AaBbCcC A 1 No Spac. Heading 1 Heading 2 Aa - 1 Normal . A. Styles Paragraph Better (B) or Worse (W) Medical Equipment Industry Average 10.0% Coration Ratio Net profit margin Return on assets Return on common equity Days sales outstanding Inventory turnover ratio Total assets turnover Current ratio Quick ratio Debt ratio Times interest carned 16.0% 28% 45 days 12x 1.8x 1.7 1.1 0.40 6.5x