Ratios from Comparative and Common-Size Data Consider the following financial statements for Waverly Compa During 2016, management obtained additional bond financing company faced higher production costs during the year for suc Because of temporary government price controls, a planned pr several months. As a holder of both common and preferred stock, you decide to WAVERLY COMPANY Balance Sheets Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets Cash and cash equivalents $19,000 $12,000 Accounts receivable (net) 55,000 43,000 120,000 105,000 Inventory 14,000 Prepaid expenses 20,000 471,000 411,000 Plant and other assets (net) $585,000 $685,000 Total Assets Liabilities and Stockholders' Equity Current liabilities $91,000 $82,000 225,000 160,000 10% Bonds payable 9% Preferred stock, $50 Par Value 75,000 75,000 Common stock, $10 Par Value 200,000 200,000 94,000 68,000 Retained earnings $685,000 $585,000 Total Liabilities and Stockholders' Eauitv WAVERLY COMPANY Income Statements (Thousands of Dollars) 2016 2015 Sales revenue $820,000 $678,000 545,000 433,920 Cost of goods sold Gross profit on sales 275,000 244,080 175,000 149,200 Selling and administrative expenses Income before interest expense and income taxes 100000 94,880 22,500 16,000 Interest expense Income before income taxes 77,500 78,880 22,900 21,300 Income tax expense $54,600 $57,580 Net income Other financial data (thousands of dollars) Cash provided by operating activities $65,200 $60,500 6,750 Preferred stock dividends 6,750 Required a. Calculate the following for each year: current ratio, quick ratio, operating-cash-flow-to-current- liabilities ratio (current liabilities were $77,000,000 at January 1, 2015), inventory turnover (inventory was $87,000,000 at January 1, 2015), debt-to-equity ratio, times-interest-earned ratio, return on assets (total assets were $490,000,000 at January 1, 2015), and return on common stockholders' equity (common stockholders' equity was $235,000,000 at January 1, 2015) b. Calculate common-size percentages for each year's income statement. a. Round answers to two decimal places. 2015 2016 2.35 2.12 Current ratio: 0.81 0.67 Quick ratio: 0.72 Operating-cash-flow-to-current-liabilities ratio: 0.74X 4.52 Inventory turnover: 4.84 Debt-to-equity ratio: 0.77 X 0.6 X Times-interest-earned ratio: 4.44 5.93 7.97 X % 9.84 X % Return on assets: 18.57 X % 21.49 X % Return on common stockholders' equity