J&H Corp. recently hired Jeffery. His immediate mandate was to analyze the company. He has to submit a report on the company's operational efficiency and estimate its potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages . Last year, J&H Corp. reported a book value of $450,000 in current assets, of which 10% is cash, 12% is short-term investments, and the rest is accounts receivable and inventory . The company reported $382,500 of current liabilities including accounts payable and accruals Interestingly, the company had no notes payable outstanding, and there were no changes in the company's accounts payable during the year . The company, however, invested heavily in plant and equipment to support its operations. It reporteda book value of $720,000 for its long-term assets last year Income Statement For the Year Ended on December 31 Industry Average J&H Corp $29,000,000 $36,250,000 29,000,000 1,450,000 30,450,000 $5,800,000 870,000 $4,930,000 1,972,000 $2,958,000 Net sales Operating costs, except depreciation and amortization Depreciation and amortization Total operating costs Operating income (or EBIT) Less: Interest expense Earnings before taxes (EBT) Less: Taxes (40%) Net income 23,200,000 1,160,000 24,360,000 $4,640,000 464,000 $4,176,000 1,670,400 $2,505,600