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(Financial analysis) The T. P. Jarmon Company manufactures and sells a line of exclusive sportswear. The firm's sales were $600,000 for the year just ended, and its total assets was $408,120. The company was started by Mr. Jarmon just 10 years ago and has been profitable every year since its inception. The chief financial officer for the firm, Brent Vehlim, has decided to seek a line of credit totaling $95,000 from the firm's bank. In the past, the company has relied on its suppliers to finance a large part of its needs for inventory. However, in recent months tight money conditions have led the firm's suppliers to offer sizable cash discounts to speed up payments for purchases. Mr. Vehlim wants to use the line of credit to replace a large portion of the firm's payables during the summer, which is the firm's peak seasonal sales period. The firm's two most recent balance sheets were presented to the bank in support of its loan request. In addition, the firm's income statement for the year just ended was provided. These statements are found in the popup window: 23 Mike Ameen, associate credit analyst for the Merchants National Bank of Midland, Michigan, was assigned the task of analyzing Jarmon's loan request. a. Calculate the financial ratios for 2018 corresponding to the industry norms provided in the popup window: T.P. Jarmon Company, Balance Sheet for 12/31/2017 and 12/31/2018 ASSETS 2017 2018 Cash $ 15,000 $ 14,000 6,250 Marketable securities 6,000 Accounts receivable 42,000 32,900 Inventory Prepaid rent Total current assets 51,000 1,200 83,500 1,070 $ $ 115,200 286,000 137,720 270,400 Net plant and equipment Total assets $ 401,200 $ 408,120 LIABILITIES AND OWNERS' EQUITY Accounts payable Notes pavable 48,000 $ 57,000 12.970 15.000 LIABILITIES AND OWNERS' EQUITY $ $ 57,000 Accounts payable Notes payable 48,000 15,000 6,000 12,970 4,910 Accruals 69,000 $ 74,880 Total current liabilities Long-term debt 160,000 172,200 141,759 191,481 Common stockholders' equity $ $ 401,200 $ 408,120 Total liabilities and equity T.P. Jarmon Company, Income Statement for the Year Ended 12/31/2018 Sales (all credit) $ 600,000 464.000 Less cost of goods sold 136.000 Gree profit JOIOS A CICULT , 464,000 Less cost of goods sold Gross profit Less operating and interest expenses $ 136,000 General and administrative $ Interest 30,500 10,600 31,000 Depreciation Total 72,100 Earnings before taxes $ 63,900 13,419 Less taxes Net income available to common stockholders 50,481 31,200 Less cash dividends Change in retained earnings 19,281 RATIO Current ratio Acid-test ratio Debt ratio Times interest earned Average collection period Inventory turnover (based on cost of goods sold) Return on common equity Operating return on assets Operating profit margin Total asset turnover Fixed asset turnover NORM 1.80 0.90 0.48 9.00 20.00 7.08 15.0 % 15.5% 13.1 % 1.20 1.80 a. Calculate the financial ratios for 2018 corresponding to the industry norms provided in the popup window: The current ratio is X. (Round to two decimal places.) The acid-test ratio is X. (Round to two decimal places.) The debt ratio is X. (Round to two decimal places.) The times interest earned ratio is X. (Round to two decimal places.) The average collection period is days. (Round to two decimal places.) The inventory turnover is X. (Round to two decimal places.) The inventory tumover is X. (Round to two decimal places.) The return on common equity is %. (Round to one decimal place.) The operating return on assets is %. (Round to one decimal place.) The operating profit margin is %. (Round to one decimal place.) The total asset turnover is X. (Round to two decimal places.) The fixed asset turnover is X. (Round to two decimal places.)