Use the financial statements below for Fox Manufacturing Company for the year ended December 31, 2015, along with the industry average ratios below to do the following:
a. Prepare and interpret a complete ratio analysis of the firm’s 2015 operations.
b. Summarize your findings and make recommendations.

Transcribed Image Text:

Fox Manufacturing Company Income Statement for the Year Ended December 31, 2015 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses General and administrative expenses Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes Net profits after taxes (Hint: Earnings available for common stockholders as there are no preferred stockholders) Earnings per share (EPS) $600,000 460,000 $140,000 $ 30,000 30,000 60,000 $ 80,000 10,000 $ 70,000 27,100 $ 42,900 $2.15