I really need help!

The financial statements and industry norms are shown below for Pamplin, Inc.:

• a. Compute the financial ratios for Pamplin for 2016 and 2017andcompare against the industry norms (better/worse).
• b. How liquid is the firm?
• c. Are its managers generating an adequate operating profit on the firm's assets?
• d. How is the firm financing its assets?
• e. Are its managers generating a good return on equity?

RATIOS

Liquidity

Quick Ratio = (Current Assets - Current Inventory) / Current Liabilities

Current Ratio = Current Assets / Current Liabilities

Average Collection Period = No. of days Average net receivables / Net credit sales

Inventory turnover = Cost of Goods Sold/Inventory

Operating profitability

Operating return on assets = (Operating profit/sales) X (sales/Total assets)

Operating profit margin = (operating Profit et sales) X 100

Total asset turnover =Sales / Total Assets

Fixed asset turnover =saleset plant & equipment

Financing

Debt ratio = Debt/Total Assets

Times interest earned= Operating Profits/Interest

Rate of return on common stockholders' investment

Return on common equity Net Income/Total Equity

Choose 7 from here to compare Norms Current Ratio 5.00 Acid Test (quick) ratio 3.00 Inventory Turnover 2.20 Average collection period 90.00 Debt Ratio 0.33 Times Interest earned 7.00 Fixed-asset turnover 1.00 Operating profit margin 20% Return on common equity 9%Pamplin Inc., Balance Sheet Assets 2016 2017 Cash 5 200 $ 150 Accounts Receivable 450 450 Inventory @ Current Assets $1,200 $1,200 Plant 8: Equipment $2,200 $2,600 Less accumulated depreciation (1,0001 (1,2001 Net plant 8: equipment $1,200 $1,400 Total Total Assets $2,400 $2,600 Accounts payable 5 200 $ 150 Notes payable {9%) 9 Current Liabilities $ 250 $ 350 Bonds (8.33% interest) Q Q Total debt 5 850 $ 950 Owners' equity common stock $300 $300 Paid-in capital 600 600 Retained earnings m E Total owners' equity $1,600 $1,700 Total liabilities and owners' equity $2,400 $2,600 Income Statement 2014 2015 Sales" $1,100 $1,450 Cost of goods sold Q @ Gross profit 5 500 5 600 Operating (expenses) (30) (40) Depreciation m E m E Operating prots 5 250 $ 360 Interest expense ($1 [$1 Net income before taxes 5 200 $ 296 Taxes (40%) 8_0 m Net income 5 120 $3 178 *15% of sales are cash sales, with the remaining 85% being credit sales