Question 5.5 - Using the information in the problem provided on page 250, you will need to calculate the ratios for 2016 for Eleanor's Computers, a retailer of computer products, and answer multiple choice questions analyzing the ratios and identifying potential problems and possible causes of the problems.

a. Current ratio

b. Quick ratio

c. Average collection period

d. Inventory turnover

e. Fixed asset turnover

f. Total asset turnover

g. Debt ratio

h. Times interest earned

i. Gross profit margin

j. Operating profit margin

k. Net profit margin

l. Return on total assets

m. Return on Equity

n - r. Multiple choice questions analyzing the ratios including identifying potential problems and explanations of possible causes of the problems.

5.5. Eleanor's Computers is a retailer of computer products. Using the financial data para vided, complete the financial ratio calculations for 2016. Advise management of any that indicate potential problems and provide an expianation of possible causes of problems Industry Averages 2016 Financial Ratios 2014 2015 2016 1.70 0.95% 65 days 4.50X 3.00 1.37% Current ratio Quick ratio Average collection period Inventory turnover Fixed asset tumover Total asset turnover Debt ratio Times interest earned Gross profit margin Operating profit margin Net profit margin Return on total assets Return on equity 171x 0.92X 60 days 4.20X 3.20X 1.40X 59,20% 4.20X 25.00% 12.50 6.10 8.54% 20.93% 1.65X 0.99X 60 days 3.90X 3.33% 1 35X 61.00 3.70X 23.00 12.70% 6.00% 8.10 20.74% 22.50 12.50 6.50 8.91 22.25 Income Statement for Year Ended 12/31/16 Balance Sheet at 12/31/16 Sales Cost of goods sold Gross profit Operating expenses Operating profit Interest expense Earnings before tax Income tax (40%) Net Income $1,500,000 1,200,000 $ 300,000 100,000 $ 200,000 72,000 128,000 51,200 76,800 Cash Accounts receivable Inventory Current assets Fixed assets (net) Total Assets Accounts payable Notes payable Accrued liabilities Current liabilities Long-term debt Total liabilities Equity Total liabilities and equity $ 125,000 275.000 325,000 $ 725,000 $ 420.000 $1,145,000 $ 150,000 225,000 100,000 475,000 400,000 875,000 270.000 $1,145,000