Use the preceding financial statements to complete the following table. Assume the industry averages given in the table are applicable for both 2011 and 2012. Compute: 1) actual 2012 ratios; 2) state whether 2012 ratios is better or worse than the industry average: and 3) state whether 2012 ratios is better or worse than the actual 2011 ratios. Show solutions in extra sheet. No solutions, no points, (12pts) Ratio Current ratio Quick Ratio Inventory turnover Average collection period Debt ratio Times interest earned ratio Industry average 1.80 0.70 2.50 37.5 days 65% 3.8 Actual 2011 1.84 0.78 2.59 36.5 days 67% 4.0 Actual 2012 1.04 0.38 2.33 57.3 days Compute the 2012 ratios and put the answers on the space provided in the table. Show solutions. No solutions, no points (2pts each ratio = total - 4points) State whether each of the 2012 ratios you computed are better or worse than the industry averages. Explain your answers. (4 points) State whether each of the 2012 ratios you computed are better or worse than the 2011 ratios. Explain your answers. (4 points) The financial statements of Zach Industries for the year ended December 31 2012, follow Zach Industries Income Statement for the Year Ended December 31, 2012 Sales revenue $160,000 Less: Cost of goods sold 106,000 Gross profits $54 000 Less: Operating expenses Selling expense $16.000 General and administrative expenses 10.000 Lease expense 1,000 Depreciation expense 10.000 Total operating expense $37.000 Operating profits $17.000 Less: Interest expense 6.100 Net profits before taxes $10.900 Less: Taxes 43601 Net profits after taxes $6.540 Zach Industries Balance Sheet December 31, 2012 Assets Cash $500 Marketable securities 1.000 Accounts receivable 25.000 Inventories 45.500 Total current assets $72.000 Land $26.000 Buildings and equipment 90,000 Less: Accumulated depreciation 38.000 Net fixed assets $78,000 Total assets $150.000 Liabilities and Stockholders' Equity Accounts payable Notes payable Total current liabilities Long-term debt Common stock (a) Retained camnings Total liabilities and stockholders' equity $22.000 47.000 $69,000 22.950 31,500 26.550 5150 000 a) The firm's 3.000 outstanding shares of common stock closed 2012 at a price of $25 per share