Use the financial statements for Fox Manufacturing Company for the year ended December 31, 2015, along with the industry average ratios, to:

for the Year Ended December 31, 2015
Sales revenue	$604,000
Less: Cost of goods sold	461000
Gross profits	$143,000
Less: Operating expenses
General and administrative expenses	$29,900
Depreciation expense	29500
Total operating expense	59400
Operating profits	$83,600
Less: Interest expense	9500
Net profits before taxes	$74,100
Less: Taxes	27100
Net profits after taxes (earnings available for common stockholders)	$47,000
Earnings per share (EPS)	$2.30

Fox Manufacturing Company Balance Sheet
December 31, 2015
Assets
Cash	$15,400
Marketable securities	6700
Accounts receivable	33500
Inventories	82300
Total current assets	$137,900
Net fixed assets	269000
Total assets	$406,900
Liabilities and Stockholders' Equity
Accounts payable	$56,700
Notes payable	12700
Accruals	5300
Total current liabilities	$74,700
Long-term debt	$149,400
Common stock equity (20,000 shares outstanding)	$109,500
Retained earnings	73300
Total stockholders' equity	$182,800
Total liabilities and stockholders' equity	$406,900

	Industry average, 2015
Current ratio	2.4
Quick ratio	0.9
Inventory turnover*	4.53 times
Average collection period*	35.3 days
Total asset turnover	1.03
Debt ratio	0.21
Times interest earned	13.1
Gross profit margin	0.205
Operating profit margin	0.142
Net profit margin	0.1
Return on total assets (ROA)	0.105
Return on common equity (ROE)	0.185
Earnings per share (EPS)	$3.34
*Based on a 365-day year and on end-of-year figures.

The debt ratio is

.

(Round to two decimal places.)

Fox Manufacturing's debt ratio is

average. (Select from the drop-down menu.)

The times interest earned ratio is

.

(Round to one decimal place.)

Fox Manufacturing's times interest earned ratio is

average. (Select from the drop-down menu.)

The gross profit margin is

.

(Round to three decimal places.)

Fox Manufacturing's gross profit margin is

average. (Select from the drop-down menu.)

The operating profit margin is

.

(Round to three decimal places.)

Fox Manufacturing's operating profit margin is

average. (Select from the drop-down menu.)

The net profit margin is

.

(Round to three decimal places.)

Fox Manufacturing's net profit margin is

average. (Select from the drop-down menu.)

The return on total assets (ROA) is

.

(Round to three decimal places.)

Fox Manufacturing's return on total assets (ROA) is

average. (Select from the drop-down menu.)

The return on common equity (ROE) is

.

(Round to three decimal places.)

Fox Manufacturing's return on common equity (ROE) is

average. (Select from the drop-down menu.)

Fox Manufacturing's earnings per share is

average. (Select from the drop-down menu.)

b. Summarize your findings and make recommendations. (Select from the drop-down menus.)

Fox Manufacturing Company needs improvement in its

ratios and possibly a reduction in its total

.

The firm is more highly leveraged than the average firm in its industry and, therefore, has more financial risk. The

of the firm is lower than average but is enhanced by the use of debt in the capital structure, resulting in a superior ROE.