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, and market.

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Sterling Company Income Statement for the Year Ended December 31, 2019 Sales revenue $10,000,000 Less: Cost of goods sold 7,500,000 $ 2,500,000 Gross profits Less: Operating expenses Selling expense 300,000 General and administrative expenses 650,000 Lease expense 50,000 Depreciation expense Total operating expense 200,000 $ 1,200,000 $ 1,300,000 Operating profits Less: Interest expense 200,000 $ 1,100,000 Net profits before taxes Less: Taxes (rate = 40%) 440,000 Net profits after taxes 660,000 Less: Preferred stock dividends 50,000 Earnings available for common stockholders 610,000 $3.05 Earnings per share (EPS) Sterling Company Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Accounts payable Notes payable Cash 2$ 200,000 2$ 900,000 Marketable securities 50,000 200,000 Accounts receivable 800,000 Accruals 100,000 Inventories 950,000 Total current liabilities $ 1,200,000 Total current assets $ 2,000,000 Long-term debt (includes financial leases) Gross fixed assets (at cost) $12,000,000 $ 3,000,000 Less: Accumulated depreciation 3,000,000 $ 9,000,000 Preferred stock (25,000 shares, $2 dividend) Net fixed assets $ 1,000,000 Other assets 1,000,000 Common stock (200,000 shares at $3 par)b 600,000 Total assets $12,000,000 Paid-in capital in excess of par value 5,200,000 Retained earnings 1,000,000 $ 7,800,000 Total stockholders’ equity Total liabilities and stockholders’ equity $12,000,000 "Annual credit purchases of $6,200,000 were made during the year. On December 31, 2019, the firm's common stock closed at $39.50 per share.