TABOR COMPANY Comparative Income Statement For the Years Ended December 31 Current Year Prior Year Sales revenue (one-half on credit) $110,000 $99,000 Cost of goods sold 52,000 48,000 Gross profit 58,000 51,000 Expenses (including $4,000 interest expense each year) 40,000 37,000 Pretax income 18,000 14,000 Income tax expense (30%) 5,400 4,200 Net income $ 12,600 $ 9,800 Assets TABOR COMPANY Comparative Balance Sheet At December 31 Current Year Prior Year Cash Accounts receivable Inventory $ 49,500 37,000 $ 18,000 32,000 25,000 38,000 Property & equipment (net) Total assets Liabilities Accounts payable Income taxes payable 95,000 105,000 $206,500 $193,000 $ 42,000 $ 35,000 1,000 500 Note payable, long-term 40,000 40,000 Stockholders' equity Capital stock ($5 par value) 90,000 90,000 Retained earnings 33,500 27,500 Total liabilities and stockholders' equity $206,500 $193,000 | Required: 1. For the current year, compute the Liquidity, Asset Management (Asset Turnover) and Leverage ratios (as defined in the Pfizer Financial Ratios Summary Report). Assume cash flows from operating activities were $14,600 and cash paid for interest was $3,800. 2. Comment on the receivable turnover and inventory turnover ratios. Any concerns. (25 POINTS)