The financial statements and industry norms are shown below for Pamplin, Inc.:
a. Compute the financial ratios for Pamplin to compare both for 2012 and 2013 against the industry norms.
b. How liquid is the firm?
c. Are its managers generating an adequate operating profit on the firm€™s assets?
d. How is the firm financing its assets?
e. Are its managers generating a good return on equity?

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Current ratio Acid-test (quick) ratio Inventory turnover Average collection perlod Debt ratio Times interest earned Total asset turnover Fixed-asset turnover Operating profit margin Return on common equity INDUSTRY NORM 5.00 3.00 2.20 90.00 0.33 7.00 0.75 1.00 20% 9% Pamplin Inc. Balance Sheet at 12/31/2012 and 12/31/2013 2012 $ 200 450 ASSETS 2013 150 425 625 $1,200 Cash Accounts receivable Inventory Current assets Plant and equipment Less accumulated depreciation Net plant and equipment Total assets 1,200 $2,200 1,000) 2,600 (1.200) 1,200 2,400 $1,400 $2,600 LIABILITIES AND OWNERS EQUITY Accounts payable Notes payable- current (9%) Current liabilitles Bonds (8.33% interest) Total debt Owners' equity Common stock 200 200 600 $ 800 150 150 300 600 $ 900 Pald-n capital Retained earnings 300 600 700 $300 600 800 Total owners' equity Total llabilities and owners' equity $1,600 $2,400 1,700 $2,600 Pamplin Inc. Income Statement for Years Ending 12/31/2012 and 12/31/2013 2012 Sales Cost of goods sold Gross profit Operating expenses 2013 $1,450 850 600 $1,200 700 S 500 30 40 Depreciation 220 200 240 Operating profits Interest expense Net income before taxes Taxes (40%) Net income 250 50 200 80 $ 120 360 64 296 118 178