Given the following financial statements historical ratios, and industry averages, calculate Sterling Company€™s financial ratios for the most recent year. (Assume a 365-day year.)

Analyze its overall financial situation from both a cross-sectional and a time-series viewpoint. Break your analysis into evaluations of the firm€™s liquidity, activity, debt, profitability, andmarket.

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Sterling Company Income Statement for the Year Ended December 31, 2012 $10,000,000 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expensc Depreciation expense $300,000 650,000 50,000 Total operating expense 00,000 $ 1,300,000 Less: Interest expense Less: Taxes (rate = 40%) Lese Preferred stock dividends Operating profits Net profits before taxes Net profits after taxes Earnings available for common stockholders $ 1,100,000 S660,000 Farnings per share (EPS) $3.05 Sterling Company Balance Sheet December 31, 2012 Liabilities and Stockholders' Equity Accounts payable Notes payable Asscts 200,000 50,000 800,000 S 900,000 Cash Marketable securitics Accounts receivable 200,000 100 Total current liabilitics Total current assets Gross fixed assets (at cost Ing-term debt lindudes Preferred stock (25,000 shares, Common stock (200,000 Paid-in capital in excess of Retained carnings financial leases) $12,000,000 S 9,000,000 $12,000,000 3,000,000 5 1,000,000 600,000 5,200,000 $2 dividend) Net fixed assets Other asscts shares at $3 pari4 par value Total stockholders' equity Total assets 1,000,000 Total liabilities and stockholders equity $12,002.000 The fim has an 8-year fnancial lease requiting annual beginning of year payments of 550,000. Five years of the lease have yet to run. Anual credit purchases of S6,200,000 were made during the year The annual principal payment on the long-term debt ix $100,000 On December 31, 2012, the firms common stock closed at $39.50 per shard. Historical and Industry Average Ratios for Sterling Company Actual 2010 Actual 2011 Quick ratio Average collection period Average payment period ays Times interest earned ratio Fixed-payment coverage ratio 0 margin Return on total assets (ROA Return on common equity (ROE) Earnings per share (EPS)