The T. P. Jarmon Company manufactures and sells a line of exclusive sportswear. The firm's sales were $599,900 for the year just ended, and its total assets exceeded $500,000. The company was started by Mr. Jarmon just 10 years ago and has been profitable every year since its inception. The chief financial officer for the firm, Brent Vehlim, has decided to seek a line of credit from the firm's bank totaling $89,000. In the past, the company has relied on its suppliers to finance a large part of its needs for inventory. However, in recent months tight money conditions have led the firm's suppliers to offer sizable cash discounts to speed up payments for purchases. Mr. Vehlim wants to use the line of credit to supplant a large portion of the firm's payables during the summer, which is the firm's peak seasonal sales period.

The firm's two most recent balance sheets were presented to the bank in support of its loan request. In addition, the firm's income statement for the year just ended was provided. These statements are found in the following tables:

T. P. Jarmon Company Balance Sheets
	2012	2013
Cash	$15,100	$14,000
Marketable securities	6,010	6,190
Accounts receivable	42,100	32,900
Inventory	51,100	84,000
Prepaid rent	1,190	1,100
Total current assets	$115,500	$138,190
Net plant and equipment	285,900	270,000
Total assets	$401,400	$408,190
	2012	2013
Accounts payable	$47,900	$57,000
Notes payable	14,900	12,900
Accruals	6,010	5,010
Total current liabilities	$68,810	$74,910
Long-term debt	160,000	150,100
Common stockholders' equity	172,590	183,180
Total liabilities and owners' equity	$401,400	$408,190

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T. P. Jarmon Company
Income Statement for 2013
Sales (all credit)		$599,900
Less: Cost of goods sold		(460,100)
Gross profit		$139,800
Less: Operating and interest expenses
General and administrative	$(30,000)
Interest	(9,900)
Depreciation	(30,000)
Total		$(69,900)
Earnings before taxes		$69,900
Less: Taxes		(27,000)
Net income available to common stockholders		$42,900
Less: Cash dividends		(31,800)
Change in retained earnings		$11,100

Jan Fama, associate credit analyst for the Merchants National Bank of Midland, Michigan, was assigned the task of analyzing Jarmon's loan request.

a.Calculate the following financial ratios for 2013:

T.P. Jarmon's:

Current ratio:

acid test ratio:

debt ratio:

times interest earned:

average collection period:

inventory turnover:

return on equity:

operating return on assets:

operating profit margin:

total asset turnover:

fixed asset turnover: