Part One

The condensed financial statements of Aries Company for the years 20X5 and 20X6 are presented below.

Aries Company

Balance Sheet

December 31

20X6		20X5
Current Assets
Cash and Equivalents	60		160
Accounts Receivable (net)	720		640
Inventory	1080		800
Prepaid Expenses	60		80
Total Current Assets	1920		1680
Property, Plant and Equipment	1520		1400
Investments	20		20
Intangibles and Other Assets	770		640
Total Assets	4230		3740
Current Liabilities	520		420
Long-Term Liabilities	1720		1440
Stockholders Equity--common	1990		1880
Total Liabilities and Stockholders Equity	4230		3740

Aries Company Income Statements

For the Years Ended December 31

20X6		20X5
Sales Revenue		6,000 5,740
Cost and Expenses
Cost of Goods Sold	4920		4720
Selling and Administrative Expenses	560		500
Interest Expense	160		140
Total Costs and Expenses	5,640		5,360
Income Before Income Tax	360		380
Income Tax Expense	140		150
Net Income	220		230

Compute the following ratios for 20X6 and 20X5.

(a) Current ratio.

(b) Inventory turnover. (Inventory on 12/31/X4 was 652.)

(c) Profit margin ratio.

(d) Return on assets. (Assets on 12/31/X4 were 3,480.)

(e) Return on common stockholders' equity. (Stockholders' equity on 12/31/X4 was

1760.)

(f) Debt to total assets ratio.

(g) Times interest earned.

Critically evaluate your ratio calculations and conclude on the current state of the company.

Word count 500 (+/- 10%)