the financial statements and industry norms for Pamplin Inc are shown in photo's

a. Compute the ratios for 2017 and 2018 to compare both against the industry norms.

b. How liquid is the firm

c.Are it's managers generating an adequate operating profit

d. How is the firm financing it's assets

e. Are it's mansgers generating a good return on equity.

NOTE: 15% of sales are cash, with the remaining 85% being credit sales.

f. Current ratio

industry norm = 5.00X

2017 ? X

2018 ? X

Evaluation is

Poor or Satisfactory?

ASSETS 2017 $ 197 449 549 $ 1.195 2018 150 423 622 $ 1,195 Cash Accounts receivable Inventory Current assets Plant and equipment Less accumulated depreciation Net plant and equipment Total assets $ 2.203 (1.009) $ 2,601 (1,202) $ 1.194 $ 2.389 $ 1,399 $ 2,594 $ 199 $ 199 602 801 151 146 $ 297 602 $ 899 LIADILITICS AND UWNERS CQUITTI Accounts payable Notes payable current (9.00% interest) Current liabilities Bonds (8.33% interest) Total debt Owners' equity Common stock Paid-in capital Retained earnings Total owners equity Total liabilities and owners' equity $ 305 605 678 305 605 785 $ 1,588 $ 2.389 $ 1695 $ 2.594 Done Pamplin Inc. Income Statement for Years Ending 12/31/2017 and 12/31/2018 2018 $ 1,450 $ 1,198 705 493 Sales (85% credit sales) Cost of goods sold Gross profit Operating expenses Depreciation Operating profits Interest expense Profit before taxes Taxes (21%) (Ratio analysis) The financial statements and industry norms for Pamplin Inc. are shown in the popup window a. Compute the ratios in the popup window, for 2017 and 2018 to compare both against the industry norms. b. How liquid is the firm? c. Are its managers generating an adequate operating profit on the firm's assets? d. How is the firm financing its assets? e. Are its managers generating a good return on equity? Note: 15% of sales are cash sales, with the remaining 85% being credit sales. a. Compute the following ratios for 2017 and 2018 to compare both against the industry norms. (Round the numbers to two decimal places and select your evaluation from the drop-down menu.) Industry Norm 2017 2018 Evaluation Current ratio 5.00x X (Click on the following icon in order to copy its contents into a spreadsheet.) 2017 2018 Industry Norm 5.00 3.00 2.20 90.00 33% Current ratio Acid-test (quick) ratio Inventory turnover Average collection period Debt ratio Times interest earned Total asset turnover Fixed asset turnover Operating profit margin Return on common equity 7.00 0.75 1.00 20.0% 9.0% (Click on the following icon in order to copy its contents into a spreadsheet.) Pamplin Inc. Balance Sheet at 12/31/2017 and 12/31/2018 ASSETS 2017 $ 197 449 549 $ 1,195 2018 $ 150 423 622 $ 1,195 Cash Accounts receivable Inventory Current assets Plant and equipment Less accumulated depreciation Net plant and equipment Total assets $ 2,203 (1,009) $ 2,601 (1,202) $ 1,194 $ 2,389 $ 1,399 $ 2,594 199 151 801 LIABILITIES AND OWNERS' EQUITY Accounts payable Notes payable current (9.00% interest) Current liabilities Bonds (8.33% interest) Total debt Owners' equity Common stock Paid-in capital Retained earnings Total owners' equity Total liabilities and owners' equity 899 305 605 678 785 $ 1,588 $ 2,389 $ 1,695 $ 2,594 201B $ 1,450 853 597 705 Pamplin Inc. Income Statement for Years Ending 12/31/2017 and 12/31/2018 2017 Sales (85% credit sales) $ 1,198 Cost of goods sold Gross profit 493 Operating expenses $ 3 Depreciation 221 Operating profits Interest expense Profit before taxes $ 40 193 62 302 $ Print Done Data Table $ $ 34 221 40 193 Sales (85% credit sales) Cost of goods sold Gross profit Operating expenses Depreciation Operating profits Interest expense Profit before taxes Taxes (21%) Net income Print Done