4. Using the data from the following Financial Statements, compute:

a. Current ratio:

b. Quick ratio:

c. Profit margin on sales:

d. Return on total assets:

e. Return on equity:

Balance Sheet Ajax Corp. Acme, Inc.

Cash $2,255,000 $67,000

Accounts Receivable $565,000 $1,110,000

Inventory $1,332,000 $2,441,000

Total Current Assets $4,152,000 $3,618,000

Net Property, Plant and Equipment $369,000 $1,327,000

Other Assets $211,000 $597,000

Total Assets $4,732,000 $5,542,000

Accounts Payable $27,000 $168,000

Notes Payable Sort Term $426,000 $819,000

Other Short Term Liabilities $2,000 $56,000

Total Current Liabilities $455,000 $1,043,000

Notes Payable Long Term $1,222,000 $943,000

Total Liabilities $1,677,000 $1,986,000

Stockholders' Equity $3,055,000 $3,556,000

Total Liabilities and Stockholders' Equity $4,732,000 $5,542,000

Income Statement Ajax Corp. Acme, Inc.

Sales $32,752,000 $4,835,000

Cost of Sales $28,273,000 $2,966,000

Gross Profit $4,479,000 $1,869,000

Selling, General and Administrative Expenses $2,541,000 $912,000

Income before Interest and Taxes $1,937,000 $957,000

Interest Expense $129,000 $88,000

Income before Taxes $1,808,000 $869,000

Taxes $723,000 $280,000

Net Income $1,085,000 $589,000

5. What does each of these financial ratios tell us about a company?

a. Current ratio

b. Quick ratio:

c. Profit margin on sales:

d. Return on total assets:

e. Return on equity: