[The following information applies to the questions displayed below.] Williams Company is a manufacturer of auto parts having the following financial statements for 2018-2019. Cash Accounts receivable Balance Sheet December 31 2019 $ 260,000 150,000 2018 $ 135,000 225,000 175,000 Inventory Total current assets 385,000 $ 795,000 $ 535,000 Long-lived assets 1,640,000 1,500,000 Total assets $2,435,000 $2,035,000 Current liabilities 200,000 175,000 Long-term debt 900,000 800,000 Shareholders' equity 1,335,000 1,060,000 Total debt and $2,435,000 $2,035,000 equity Income Statement For the years ended December 31 Sales 2019 $3,500,000 Cost of sales 2,500,000 Gross margin 1,000,000 Operating expenses* Operating income Taxes 2018 $3,600,000 2,600,000 1,000,000 500,000 450,000 500,000 550,000 175,000 192,500 Net income $ 325,000 $ 357,500 Cash Flow from Operations 2019 2018 Net income $325,000 $357,500 Plus depreciation expense 60,000 50,000 + Decrease (-increase) in accounts receivable and inventory (135,000) + Increase (-decrease) in current liabilities Cash flow from operations $275,000 $407,500 25,000 *Operating expenses include depreciation expense. Additional financial information, including industry averages for 2019, where appropriate, includes: Capital expenditures $ 2019 125,000 $ 2018 100,000 Industry 2019 Income tax rate 35% Depreciation expense $ 60,000 $ 35% 50,000 35.0% Dividends $ 50,000 $ 50,000 Year-end stock price $ 2.25 $ 2.75 25.00 Number of outstanding 1,800,000 1,800,000 shares Sales multiplier 1.50 Free cash flow multiplier Earnings multiplier Cost of capital Accounts receivable turnover 18.00 9.00 5.0% 5.0% 11.10 Inventory turnover 10.50 Current ratio 2.30 Quick ratio 1.90 Cash flow from 1.20 operations ratio Free cash flow ratio 1.10 Gross margin percentage 30.0% Return on assets (net 20.0% book value) Return on equity 30.0%