You are provided below with the 20X4 condensed SCI and the 20X4 and 20X3 condensed SFP for Hiro Corp.

Required:
1. Compute the ratios for 20X4 which are listed below. Round to two decimal places. Hiro Corp.’s tax rate is 32%.
a. Return on total long-term capital, after tax
b. Times interest earned
c. Operating margin
d. Return on equity
e. Average days in payables
f. Inventory turnover
2. Refer to the inventory turnover you calculated in (f). How many average days in inventory is this? If Hiro Corp. wanted to decrease the number of days of sales in inventory what advantage and disadvantage may result?

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Sales revenue Cost of goods sold Gross profit HIRO CORP. Condensed Statement of Comprehensive Income Year ended 31 December 20X4 Operating expenses Operating income Interest expense Income before income taxes Income tax expense Net income and comprehensive income $349,000 110,000 239,000 77,000 162,000 4,500 157,500 50,400 107,100