What is the profitability ratio?

Current assets................. $18,000 Net sales......................................$40,000

Current liabilities.............. 8,000 Total liabilities..............................10,000

Average assets............... 80,000 Shareholders equity......................50,000

Total assets.................... 60,000 Market price of shares.........................$4

Net income..................... 18,000 Weighted average number

of common shares........................ 26,000

1. 0.17 times

2. 12.5 times

3. 17.25 times

4. 20.0 times