(Analyzing financial statements) Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheets and income statements for the two firms are as follows:

a. Calculate the following ratios for both Carson and BGT:

b. Analyze the differences you observe between the two firms. Comment on what you view as weaknesses in the performance of Carson as compared to that of BGT that Carson’s management might focus on to improve its operations.

($ thousands) Cash Accounts receivable Inventory Total current assets Carson Electronics, Inc. Balance Sheet $ 2,000 4,500 BGT Electronics, Inc. Balance Sheet $ 1,500 6,000 1,500 2,500 $ 8,000 $10,000 Net fixed assets 16,000 25,000 Total assets Accounts payable Accrued expenses Short-term notes payable Total current liabilities $24,000 $ 2,500 $35,000 $ 5,000 1,000 1,500 3,500 1,500 $ 7,000 $ 8,000 Long-term debt 8,000 4,000 Total common stockholders' equity 9.000 23,000 Total liabilities and stockholders' equity $24,000 $35,000