Using the financial statements for Happy Hamburger Company below:

Calculate the indicated ratios for Happy Hamburger.

Suppose Happy Hamburger doubles its sales as well as its inventories, accounts receivable, and common equity during the year. How would that information affect the validity of your ratio analysis?

Happy Hamburger Company
Income Statement for the year ending December 31, 20XX
Sales	1,607,500
Cost of goods sold	1,392,500
Selling, general and administrative expenses	145,000
Earnings before interest and taxes (EBIT)	70,000
Interest expense	24,500
Earnings before taxes (EBT)	45,500
Federal and state income taxes (40%)	18,200
Net Income	27,300

Happy Hamburger Company
Balance Sheet as of December 31, 20XX
Assets			Liabilities and Shareholder Equity
Cash	80,500		Accounts payable	132,000
Accounts Receivable	334,500		Current portion of debt	84,000
Inventories	240,000		Other current liabilities	114,000
Total current assets	655,000		Total current liabilities	330,000
Net fixed assets	292,500		Long-term debt	256,500
Total assets	947,500		Total Liabilities	586,500
			Common equity	361,000
			Total Liabilities & Equity	947,500

	Happy	Industry
	Hamburger	Average
Current ratio		2.2
Days sales outstanding (based on 365 day year)		36 days
Inventory turnover		6.7
Fixed asset turnover		12.1
Total asset turnover		3.00
Return on sales		1.20%
Return on assets		3.60%
Return on equity		9.00%
Debt ratio		55%