These are the financial statements of Zach Industries for the year ending December 31, 2012. Use the following information to calculate the market-to-book ratio (M/B).

Zach Industries Income Statement			Zach Industries Balance Sheet December 31, 2012
for the Year Ended December, 31, 2012			Assets
Sales revenue	$160,000		Cash	$500
Less: Cost of goods sold	$106,000		Marketable securities	$1,000
Gross profits	$54,000		Accounts receivable	$25,000
Less: Operating expenses			Inventories	$45,500
Selling expense	$16,000		Total current assets	$72,000
General and administrative expenses	$10,000		Land	$26,000
Lease expense	$1,000		Buildings and equipment	$90,000
Depreciation expense	$10,000		Accumulated depreciation	$38,000
Total operating expense	$37,000		Net fixed assets	$78,000
Operating profits	$17,000		Total assets	$150,000
Less: Interest expense	$6,100		Liabilities and Stockholders' Equity
Net profits before taxes	$10,900		Accounts payable	$22,000
Taxes	$4,360		Notes payable	$47,000
Net profits after taxes	$6,540		Total current liabilities	$69,000
			Long-term debt	$22,950
			Common stock*	$31,500
			Retained earnings	$26,550
			Total liabilities and stockholders equity	$150,000

*The firms 3000 outstanding shares of common stock closed 2012 at a price of $25 per share.

A.

1.2

B.

1.3

C.

1.5

D.

1.4

Please explain step by step how you got your answer