M. K. Berry is the managing director of CE Ltd. a small, family-owned company which manufactures cutlery. His company belongs to a trade association which publishes a monthly magazine. The latest issue of the magazine contains a very brief article based on the analysis of the accounting statements published by the 40 companies which manufacture this type of product. The article contains the following table: Average for all companies in the industry Return on equity 33% Return on total assets 29% Gross margin percentage 30% Current ratio 1.9:1 Average sale period 37 days Average collection period 41 days CE Ltd's latest financial statements are as follows: CE Ltd. Income Statement for the year ended 31 October (in thousands) Sales 900 Cost of goods sold 720 Gross margin Selling and administrative expenses 55 Interest 15 Net income 110 180 The country in which the company operates has no corporate income tax. No dividends were paid during the year. All sales are on account. CE Ltd. Balance Sheets as of 31 October (in thousands) This Year Last Year 5 20 120 110 96 80 500 460 670 721 Current assets: Cash Accounts receivable Inventories Noncurrent assets Total assets Current liabilities: Accounts payable Noncurrent liabilities: Bonds payable Common stock Retained earnings Total liabilities and stockholders' equity 147 206 150 150 100 1001 324 214 721 670 Required: a. Calculate each of the ratios listed in the magazine article for this year for CE, and comment briefly on CE Ltd's performance in comparison to the industrial averages. b. Explain why it could be misleading to compare CE Ltd's ratios with those taken from the article