(please , use your keyboard ) The firms most recent financial statements were provided to its bank as support for the firms loan request. Joanne Peebie, a loan analyst trainee for the Morristown Bank and Trust, has been assigned the task of analyzing the firms loan request.

Calculate the financial ratios for 2003 corresponding to the industry norms provided below:( Interpret the results)

1. Total Asset Turnover
2. Debt Ratio
3. Time interest earned
4. ROE

RPI, INC. Balance Sheets for 12/31/02 and 12/31/03 Assets Cash Marketable securities Accounts receivable Inventory Prepaid rent Total current assets Net plant and equipment Total assets 2002 $ 16,000 7,000 42,000 50,000 1.200 $116,200 286,000 $402,200 2003 $17,000 7,200 38,000 93,000 1,100 $156,300 290,000 $446,300 Liabilities and Stockholders' Equity 2002 Accounts payable $48,000 Notes payable 16,000 Accruals 6,000 Total current liabilities $70,000 Long-term debt $160,000 Common stockholders' equity $172,200 Total liabilities and equity $402,200 2003 $55,000 13,000 5,000 $73,000 $150,000 $223,300 $446,300 RPI, INC. Income Statement For the Year Ended 12/31/03 $700,000 500,000 $200,000 $50,000 10,000 30,000 Sales (all credit) Less: Cost of goods sold Gross profits Less: Operating and interest expenses General and administrative Utility expenses Depreciation Total Profit before taxes Less: Taxes Less: Interest Net income available to common stockholders Less: Cash Dividends Net Income 90,000 $110,000 27.100 10,000 $82,900 31.800 $51,100 Current ratio Acid-test ratio Debt ratio Total asset turnover Times interest earned Average collection period Inventory turnover (based on COGS) Ratio Norm 1.80 0.90 0.50 1.15 10.00 20.00 7.00