Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $183,300 $408,300 Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2015, follow. P3-24 Zach Industries Income Statement for the Year Ended December 31, 2015 $160,000 106,000 54,000 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense S 16,000 10,000 1,000 Total operating expense Operating profits Net profits before taxes Net profits after taxes 5 37,000 S 17,000 6,100 s 10,900 Less: Interest expense Less: Taxes S 6,540 110 PART 2 Financial Tools Zach Industries Balance Sheet December 31, 2015 Cash Marketable securities Accounts receivable Inventories S $00 1,000 25,000 45,500 Total current assets Buildings and equipment Less: Accumulated depreciation 26,000 90,000 38,000 Net fixed assets Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable 22,000 47,000 S 69,000 Total current liabilities Long-eerms debe Common stock Retained earnings Total liabilities and stockholders' equity 150,000 The frm's 3,000 ouncanding shares ed common stock closed 22,950 31,500 2015 at a peice of $25 per share. a. Use the preceding financial statements to complete the following table. Assume that the industry averages given in the table are applicable for both 2014 and 2015. Actual 2015 Industry average 1.80 0.70 2.50 Actual 2014 Ratio Current ratio Quick ratio Inventory turnover Average collection period" Debe ratio Times interest earned ratio Gross profit margin Net profit margin Return on total assets Return on common equity Market/book ratio 1.84 0.78 2.59 37.5 days 65% 36.5 days 67% 3.8 4.0 38% 40% 3.5% 4,0% 9.5% 1.1 3.6% 4.0% 8.0% 1.2 - Basd on a 365-day year and on end-of-year Eigures b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, 2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition