The balance sheet and income statement shown below are for Gibson Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

Balance Sheet (Millions of $)

Assets 2012

Cash and securities $ 2,500

Accounts receivable 11,500

Inventories 16,000

Total current assets $30,000

Net plant and equipment $20,000

Total assets $50,000

Liabilities and Equity

Accounts payable $ 9,500

Notes payable 7,000

Accruals 5,500

Total current liabilities $22,000

Long-term bonds $15,000

Total debt $37,000

Common stock $ 2,000

Retained earnings 11,000

Total common equity $13,000

Total liabilities and equity $50,000

Income Statement (Millions of $) 2012

Net sales $87,500

Operating costs except depreciation 81,813

Depreciation 1,531

Earnings bef interest and taxes (EBIT) $ 4,156

Less interest 1,375

Earnings before taxes (EBT) $ 2,781

Taxes 973

Net income $ 1,808

Other data:

Shares outstanding (millions) 500.00

Common dividends $632.73

Int rate on notes payable & L-T bonds 6.25%

Federal plus state income tax rate 35%

Year-end stock price $43.39

Answer the questions below and complete table 1. Be sure to comment on how Gibson Inc. is doing relative to the industry.

What is the firm's current ratio?

What is the firm's quick ratio?

What is the firm's days sales outstanding(DSO)? Assume a 365-day year for this calculation.

What is the firm's total assets turnover?

What is the firm's inventory turnover ratio?

What is the firm's TIE?

7. What is the firm's debt/assets ratio?

What is the firm's ROA?

What is the firm's ROE?

What is the firm's Profit Margin?

Table 1

Ratio	Formula	Gibson Inc.	Industry Average	Comments:
Current Ratio			1.5x
Quick Ratio			.7x
DSO			35 days
Total Asset Turnover			1.75x
Inventory Turnover Ratio			6.5x
TIE			4x
Debt/Asset Ratio			45%
ROA			7%
ROE			16%
Profit Margin			5%