Chris Guthrie was recently hired by S&S Air, Inc., to assist the company with its financial planning and to evaluate the company's performance. Chris graduated from college five years ago with a finance degree. He has been employed in the finance department of a Fortune 500 company since then.

1. Calculate the ratios for S&S Air that are shown for the industry.

2. Mark and Todd agree that a ratio analysis can provide a measure of the company's performance. They have chosen Boeing as an aspirant company. Would you choose Boeing as an aspirant company? Why or why not?

3. Compare the performance of S&S Air to the industry. For each ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an inventory ratio calculated by inventory divided by current liabilities. How do you think S&S Air's ratio would compare to the industry average?

4. Calculate the internal growth rate and sustainable growth rate for S&S Air. What do these numbers mean?

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S&S AIR, INC 2016 Income Statement $24,092,400 17,982,000 2,878,800 786,000 $2,445,600 434,400 $2,011,200 804,480 $ 1.206,720 Sales Cost of goods sold Other expenses EBIT Interest Taxable income Taxes (40%) Net income $246,000 960,720 Additions to retained earnings S&S AIR, INC 2016 Balance Sheet Assets Liabilities and Equity Current assets Current liabilities Cash Accounts receivable 438,048 1,841,616 1,486,200 Total current assets 3,765,864 $858,816 1,735,680 2,594,496 Accounts payable Notes payable Total current liabilities Fixed assets 4,590,000 Long-term debt Shareholder equity Net plant and $14,778,816 $180,000 $11,180,184 $11.360,184 $18,544,680 Common stock Retained earnings Total equity Total assets $18,544,680 Total liabilities and equity Light Airplane Industry Ratios Lower Quartile Median Upper Quartile 1.43 1.89 1.05 39 1.28 0.89 1.51 Current ratio Quick ratio Cash ratio Total asset turnover Inventory turnover Receivables turnover Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Profit margin Return on assets Return on equity .50 64 .08 68 4.89 6.27 .31 .58 85 6.15 9.82 5.18 5.84 4.05% 6.05% 9.93% 1.08 2.08 8.06 8.43 5.15% 10.53% 16.54% 1.56 2.56 9.83 10.27 6.47% 13.21% 26, 15%