Use the financial statements on the next page to answer

Compute the following financial ratios for the two years 2013, 2014

1. Total Asset Turnover

2. Fixed Asset Turnover

3. Inventory Turnover

4. Average collection period.

5. Current Ratio

6. Quick (Acid Test)

7. Cash ratio

8. Market-to-Book

9. P/E ratio

10. ROE

10. Decompose the ROE for the two years into:

Tax Burden, Interest Burden, Margin, Turnover, Leverage, Compound Leverage and ROA

Write a short note on the financial health of the company.

Income Statement	2012	2013	2014
Sales Revenues		130,000	150,000
COGS (including Depreciation)		85,800	105,000
Depreciation		20,000	25,000
S&A Expenses		15,000	18,000
Operating Income		29,200	27,000
Interest Expense		12,000	15,000
Taxable Income		17,200	12,000
Income Tax (40%)		6,880	4,800
Net Income		10,320	7,200
Balance Sheet	2007	2008	2009
Cash & MS	20,000	30,000	28,000
Accounts Receivable	40,000	50,000	60,000
Inventories	75,000	80,000	100,000
Net PPE	120,000	140,000	160,000
Total Assets	255,000	300,000	348,000
Liabilities
Accounts Payable	50,000	60,000	85,000
Short-term Debt	45,000	72,000	85,000
LT Debt (8% Bonds)	75,000	74,000	80,000
Total Liabilities	170,000	206,000	250,000
Shareholders Equity	85,000	94,000	98,000
Price per share		$ 85.00	$ 77.00
No of shares	10,000	10,000	10,000
Dividends Paid		1,320	3,200