The financial statements of Farmer Corporation follow (Click the icon to view the assets section of the balance sheet.) Calculate these profitability measures for 2018. Show each computation a. Rate of return on sales. 1 2 (Click the icon to view the liabilities and stockholders' equity sections of the balance sheet.) b. Asset turnover ratio. c. Rate of return on total assets 3 (Click the icon to view the income statement.) d. Leverage (equity multiplier) ratio. e. Rate of return on comm mon stockholders' equity f. Is Farmer's profitability strong, medium, or weak? a. Compute the rate of return on sales for 2018. (Enter currency amounts in millions as given in the question. Ignore interest expense in your analysis and enter "0" for any zero balances. Round your answer to the nearest tenth of a percent, X.X%.) (1) (2) (3 Rate of return on sales b. Compute the asset turnover ratio for 2018. (Enter currency amounts in millions as given in the question. Round average calculations to the nearest whole million. Round the asset turnover ratio to three decimal places, X.XXX.) (4) (5) Asset turnover ratio c. Compute the rate of return on total assets for 2018. (Enter any ratios to three decimal places, X.XXX, and enter percentages to one decimal place, X.X%.) (6) (7) Rate of return on total assets X % X d. Compute the leverage (equity multiplier) ratio for 2018. (Abbreviation used; SE stockholders' equity. Enter currency amounts in millions as given in the question. Round the leverage ratio three decimal place, X.XXX.) (8) (9) Leverage ratio e. Compute the rate of return on common stockholders' equity for 2018. (Abbreviation used; SE stockholders' equity. Ignore interest expense in = your analysis. Enter "0" for zero balances. Round your answer to one decimal place, XX.X%.) (10) (11) (12) ( Rate of retun on common SE f. Is Farmer's profitability strong, medium, or weak? These rates of return are (13) 1: Data Table Farmer Corportion Balance Sheets (Adapted) December 31, 2018 and 2017 Increase (Decrease) (Dollar amounts in millions) Amount Percentage 2018 2017 Assets Current assets: Cash and cash equivalents 1,240 $ 950 $ 290 30.5 % Short-term investments (30) (54.5) 25 55 Receivables, net 200 290 (90) (31.0) Inventories 128 78 50 156.0 302 (48) 254 Prepaid expenses and other assets (15.9) 1,847 1,647 200 Total current assets 12.1 Property, plant, and equipment, net 3,036 3,034 2 0.1 Intangible assets 1,050 858 22,4 192 840 740 100 Other assets 13.5 6,773 $ 6,279 $ 494 7,9% Total assets se 2: Data Table Farmer Corporation Balance Sheet (Adpated) December 31, 2018 and 2017 Increase (Decrease) (Dollar amounts in millions) 2018 2017 Amount Percentage Liabilities and Stockholders' Equity Current liabilities: Accounts payable 930 $ 850 $ 9.4 % 80 Income tax payable 30 85 (55) (64.7) Short-term debt 160 95 65 68.4 60 65 Other (7.7) 1,180 1,095 85 Total current liabilities 7,8 Long-term debt 413 15.3 3,105 2,692 1,040 100 1,140 Other liabilities 9,6 5,425 4,827 598 Total liabilities 12.4 Stockholders' equity: Common stock 2 2 Retained earnings (134) (8.1) 1,526 1,660 (180) (210) 30 Accumulated other comprehensive (loss) 14.3 1,348 1,452 (104) Total stockholders' equity (7.2) 6,773 $ 6,279 $ 494 Total liabilities and stockholders' equity 7,9 % 3: Data Table Farmer Corporation Statements of Income (Adapted) Year Ended December 31, 2018 and 2017 (Dollar amounts in millions) 2018 2017 8,330 $ Net revenues 9,250 2,670 5,100 Cost of goods sold Gross profit 5,660 4,150 3,400 3,600 General and administrative expenses Income from operations 2,260 550 565 110 Interest expense, net Income before income taxes 440 1,695 862 200 Provision for income taxes 833 $ 240 Net income