Roland, Inc.

Use the information in the balance sheet and income statement to compute the financial ratios for Roland. Perform the DuPont analysis. Compare Roland against its industry average. Make conclusions about Roland's relative performance.

	Roland	Industry Comparison
Current ratio		2.1
Quick ratio		1.1
Debt ratio		.5
Times interest earned		4.0
Inventory turnover		7.0
Average collection period		34 days
Fixed assets turnover		4.0
Total assets turnover		2.0
Profit margin		5%
Return on total assets		16%
Return on equity		20%

1 ....... 2...... 4, 1, 5, 1, 6. Roland Inc. 2010 Income Statement (In Thousands of Dollars) Net sales Cost of goods sold Operating expenses Depreciation EBIT Interest Taxable income Taxes Net income $6,026 4,500 800 100 $ 626 196 $ 430 145 $ 285 Retained earnings Dividends $200 $85 2010 Balance Sheet ASSETS Current assets Cash Marketable securities Accounts receivable Inventory Total $ 120 80 800 1,000 $2,000 Fixed Assets Net plant and equipment $1200 Total Assets $3200 LIABILITIES AND EQUITY Current liabilities Accounts payable Notes payable Accruals Total $ 300 500 40 $ 840 Long-term debt $ 860 Stockholders' equity Common stock Retained earnings Total $ 500 1,000 $1500 Total Claims $3200