(Ratio analysis) The financial statements and industry norms for Pamplin Inc. are shown in the popup window: a. Compute the ratios in the popup window,, for 2017 and 2018 to compare both against the industry norms. b. How liquid is the firm? c. Are its managers generating an adequate operating profit on the firm's assets? d. How is the firm financing its assets? e. Are its managers generating a good return on equity? Note: 15% of sales are cash sales, with the remaining 85% being credit sales. a. Compute the following ratios for 2017 and 2018 to compare both against the industry norms. (Round the numbers to two decimal places and select your evaluation from the drop-down menu.) Industry Norm 2017 2018 Evaluation Current ratio 5.00X Satisfactory Poor 2017 2018 Cash $ 200 $ 150 Accounts receivable 450 425 Inventory 550 625 Current assets 1,200 1,200 2,200 2,600 (1,200) Plant and equipment Less accumulated depreciation Net plant and equipment (1,000) 1,200 1,400 2,400 2,600 Total assets LIABILITIES AND OWNERS' EQUITY Accounts payable $ 200 150 Notes payable current (9.00% interest) 0 150 $ 300 Current liabilities 200 $ Bonds (8.33% interest) 600 600 $ 900 Total debt 800 Owners' equity $ 300 Common stock 300 Paid-in capital Retained earnings Total owners' equity Total liabilities and owners' equity 600 600 800 700 1,600 1,700 $ 2,600 2,400 Pamplin Inc. Income Statement for Years Ending 12/31/2017 and 12/31/2018 2017 2018 Sales (85% credit sales) $1,200 $1,450 Cost of goods sold Gross profit 700 850 $ 500 $ 600 $ 30 $ 40 Operating expenses Depreciation Operating profits Interest expense 220 250 200 240 360 250 64 50 Profit before taxes S 296 200 Taxes (21%) 42 62 Net income $ $ 234 158 Industry Norm 2017 2018 Current ratio Acid-test (quick) ratio Inventory turnover Average collection period Debt ratio Times interest earned Total asset turnover Fixed asset turnover 5.00 3.00 2.20 90.00 33% 7,00 0.75 1.00 Operating profit margin Return on common equity 20.0% 9.0%