Use the consolidated income statement and consolidated balance sheet of Tentacle Acres Company and Subsidiaries to calculate the following ratios and comments on your results.

Tentacle Acres Company and Subsidiaries

Income Statement for 2015 (000 dollars)

Sales	$ 94,001
Cost of Goods Sold	46,623
Gross Profit	47,378
Selling and Administrative Expenses	28,685
Depreciation and R&D Expense (both tax deductible)	5,752
EBIT or Operating Income	12,941
Interest Expense	48
Interest Income	427
Earnings Before Taxes (EBT)	13,320
Income Taxes	4,700
Net Income (NI)	8,620
Earnings per Share	1.72

Tentacle Acres Company and Subsidiaries

Balance Sheet as of End of 2015 (000 dollars)

Assets:			Liabilities:
Cash	$ 5,534		Accounts Payable	3,253
Marketable Securities	952		Notes Payable
Accounts Receivable (gross)	14,956		Accrued Expenses	6,821
Less: Allowance for Bad Debts	211		Bonds Payable	2,389
Accounts Receivable (net)	14,745		Stockholders Equity:
Inventory	10,733		Common Stock	8,549
Prepaid Expenses	3,234		Retained Earnings	45,959
Plant and Equipment (gross)	57,340		Total Liabilities and Equity	66,971
Less: Accumulated Depreciation	29,080
Plant and Equipment (net)	28,260
Land	1,010
Long-Term Investments	2,503
Total Assets	66,971

Calculate the following ratios for 2015 and compare with the industry average shown in the parentheses. Comment on your results.

a. Net profit margin (5%)

b. Return on equity (14%)

c. Current ratio (2.8)

d. Quick ratio (2.1)

e. Debt to total assets (50%)

f. Times interest earned. (5x)

g. Average collection period

h. Inventory turnover

i. economic value added (EVA)

j.

Calculate the economic value added (EVA) for Tentacle Acres, assuming that the firms income tax rate is 35 percent, the weighted average rate of return expected by the suppliers of the firms capital is 10 percent, and the market price of the firms stock is $15. There are 5 million shares outstanding. Comment on your results.