Your final is located in chapter 23 of the text. Please refer to page 23-30 of your text. We will be using the income statement data and balance sheet data provided in Practice 23-3 for Company A and Practice 23-5 for Company A. Using the information provided within these two statements, you should compute the following ratios.

23-3 Company A reported the following income statement data for the most recent three years:

Description	Year 3	Year 2	Year 1
Sales	$330,000	$260,000	$300,000
Cost of goods sold	(163,000)	(144,000)	(156,000)
Oprating expenses:
Marketing expense	(21,000)	(21,000)	(22,000)
R&D expense	(27,000)	(6,000)	(14,000)
Administrative expense	(45,000)	(50,000)	(48,000)
Operating income	$74,000	$39,000	$60,000
Interest expense	(6,000)	(11,000)	(7,000)
Income before income taxes	$68,000	$28,000	$53,000
Income tax expense	(25,000)	(8,000)	(20,000)
Net income	$43,000	$20,000	$33,000

Prepare a common-size income statement for each year.

23-5

Description	Year 3	Year 2	Year 1
Cash	$8,000	$8,000	$6,000
Accounts receivable	18,000	37,000	18,000
Inventory	36,000	47,000	36,000
Current assets	$62,000	$92,000	$60,000
Property, plant, and equipment (net)	138,000	126,000	123,000
Total assets	$200,000	$218,000	$183,000
Accounts payable	$28,000	$39,000	$21,000
Short-term debt	15,000	20,000	15,000
Current liabilities	$43,000	$59,000	$36,000
Long-term debt	52,000	65,000	58,000
Total liabilities	$95,000	$124,000	$94,000
Paid-in capital	19,000	19,000	19,000
Retained earnings	86,000	75,000	70,000
Total liabilities and equities	$200,000	$218,000	$183,000

Prepare the Assets section of a common-size balance sheet for each year. (Note: Refer to Practice 23-3 for sales data.)

1. Return on Equity (calculate for year 1, year 2, and year 3)

2. Return on Sales (calculate for year 1, year 2, and year 3)

3. Asset turnover (calculate for year 1, year 2, and year 3)

4. Assets to equity Ratio (calculate for year 1, year 2 and year 3)

5. Accounts receivable turnover (calculate for year 2 and year 3)

6. Average Collection Period (calculate for year 2 and year 3

7. Inventory Turnover (calculate for year 2 and year 3)

8. Number of Days Sales in Inventory (calculate for year 2 and year 3)

9. Debt ratio (calculate for year 1, year 2 and year 3)

10. Debt-to-equity Ratio (calculate for year 1, year 2 and year 3)

Please show all work.