Please see the Balance Sheet and Income Statement for Fenway Fertilizer and Farm Products, Inc. for the fiscal

Year ended December 31, 2018.

Calculate the following ratios for 2018 for Fenway Fertilizer and Farm Products, Inc.:

Industry Average

a. Average Collection Period: 45 days

b. Debt Ratio: 64.7%

c. Return on Equity (ROE): 8.2%

d. Current Ratio: 1.3

Industry Average

e. Inventory Turnover: 5.7

f. Times Interest Earned (TIE): 2.3

g. Net Profit Margin: 3.6%

h. Return On Total Assets (ROA): 2.9%

e. Based on the ratios you have calculated above, does Fenway Fertilizer and Farm Products, Inc. appear to

be stronger or weaker than the industry average data? Which specific ratios led you to this conclusion?

FENWAY FERTILIZER AND FARM PRODUCTS, INC. Income Statement for Year Ended December 31, 2018 -------------2018---------------- DOLLARS % OF SALES Sales Revenue 3,750,000 100.00% Cost of Goods Sold 2,600,0006 9.33% Gross Profit 1,150,000 30.67% Depreciation Expense 695,000 18.53% Operating Profits (EBIT) 455,000 12.13% Interest Expense 255,000 6.80% Profit Before Taxes 200,000 5.33% Less: Taxes @ 21% 42,000 1.12% Net Profit After Taxes 158,000 4.21%

FENWAY FERTILIZER AND FARM PRODUCTS, INC. Balance Sheet As of December 31, 2018 -------------2018---------------- DOLLARS % OF ASSETS ASSETS: Cash 35,000 0.65% Accounts Receivable 775,000 14.46% Inventories 900,000 16.79% Total Current Assets 1,710,000 31.90% Net Fixed Assets 3,650,000 68.10% TOTAL ASSETS 5,360,000 100.00% LIABILITIES AND EQUITY: Accounts Payable 135,000 2.52% Notes Payable 450,000 8.40% Accruals 275,000 5.13% Total Current Liabilities 860,000 16.04% Long-Term Debt 3,250,000 60.63% TOTAL LIABILITIES 4,110,000 76.68% Common Stock 250,000 4.66% Retained Earnings 1,000,000 18.66% TOTAL STOCKHOLDERS' EQUITY 1,250,00023.32% TOTAL LIABILITIES AND EQUITY 5,360,000 100.00%