$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|$l$|\}\backslash$hline & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$Year $2\}$ & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$Year $1\}\backslash \backslash \backslash$hline a$.$ Net margin & $18\mathrm{.}95$ & $\backslash \%$ & $18\mathrm{.}42$ & $\backslash \%\backslash \backslash \backslash$hline b$.$ Return on investment & & $\backslash \%$ & $13\mathrm{.}80$ & $\backslash \%\backslash \backslash \backslash$hline c$.$ Return on equity & & $\backslash \%$ & $26\mathrm{.}66$ & $\backslash \%\backslash \backslash \backslash$hline d$.$ Earnings per share & $\backslash$$ $1\mathrm{.}01$ & & $\backslash$$ $0\mathrm{.}82$ & $\backslash \backslash \backslash$hline e$.$ Price$-$earnings ratio & $4\mathrm{.}73$ & times & $7\mathrm{.}42$ & times $\backslash \backslash \backslash$hline f$.$ Book value per share of common stock & $\backslash$$ $3\mathrm{.}80$ & & $\backslash$$ $3\mathrm{.}08$ & $\backslash \backslash \backslash$hline g$.$ Times interest earned & $28\mathrm{.}04$ & times & $23\mathrm{.}09$ & times $\backslash \backslash \backslash$hline h$.$ Working capital & $\backslash$$ $94,100$ & & $\backslash$$ $87,300$ & $\backslash \backslash \backslash$hline i Current ratio & $2\mathrm{.}71$ & & $2\mathrm{.}70$ & $\backslash \backslash \backslash$hline j$.$ Quick $($acid$-$test$)$ ratio & $0\mathrm{.}78$ & & $0\mathrm{.}79$ & $\backslash \backslash \backslash$hline k$.$ Accounts receivable turnover & $6\mathrm{.}21$ & times & $5\mathrm{.}79$ & times $\backslash \backslash \backslash$hline i$.$ Inventory turnover & $1\mathrm{.}22$ & times & $1\mathrm{.}09$ & times $\backslash \backslash \backslash$hline m $.$ Debt$-$to$-$equity ratio & $0\mathrm{.}77$ & & $0\mathrm{.}93$ & $\backslash \backslash \backslash$hline n$.$ Debt$-$to$-$assets ratio & $44$ & $\backslash \%$ & $48$ & $\backslash \%\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}$ The following financial statements apply to Rooney Company:

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$Income Statements for the Years Ending December $31$ Year $2$ Year $1\}\backslash \backslash$

$\backslash$hline Revenues & $\backslash$$ $219,000$ & $\backslash$$ $183,000\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Expenses$\}\backslash \backslash$

$\backslash$hline Cost of goods sold & $124,500$ & $102,900\backslash \backslash$

$\backslash$hline Selling expenses & $19,400$ & $17,400\backslash \backslash$

$\backslash$hline General and administrative expenses & $10,600$ & $9,600\backslash \backslash$

$\backslash$hline Interest expense & $2,300$ & $2,300\backslash \backslash$

$\backslash$hline Income tax expense & $20,700$ & $17,100\backslash \backslash$

$\backslash$hline Total expenses & $177,500$ & $149,300\backslash \backslash$

$\backslash$hline Net income & $\backslash$$ $41,500$ & $\backslash$$ $33,700\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$ROONEY COMPANY Balance Sheets As of December $31\}\backslash \backslash$

$\backslash$hline & Year $2$ & Year $1\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Assets$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Current assets$\}\backslash \backslash$

$\backslash$hline Cash & $\backslash$$ $5,000$ & $\backslash$$ $6,800\backslash \backslash$

$\backslash$hline Marketable securities & $2,400$ & $2,400\backslash \backslash$

$\backslash$hline Accounts receivable & $35,300$ & $31,600\backslash \backslash$

$\backslash$hline Inventories & $101,900$ & $94,400\backslash \backslash$

$\backslash$hline Prepaid expenses & $4,500$ & $3,500\backslash \backslash$

$\backslash$hline Total current assets & $149,100$ & $138,700\backslash \backslash$

$\backslash$hline Plant and equipment $($net$)$ & $105,500$ & $105,500\backslash \backslash$

$\backslash$hline Intangibles & $21,800$ & $0\backslash \backslash$

$\backslash$hline Total assets & $\backslash$$ $276,400$ & $\backslash$$ $244,200\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Liabilities and Stockholders' Equity$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Liabilities$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$Current liabilities$\}\backslash \backslash$

$\backslash$hline Accounts payable & $\backslash$$ $38,800$ & $\backslash$$ $35,900\backslash \backslash$

$\backslash$hline Other & $16,200$ & $15,500\backslash \backslash$

$\backslash$hline Total current liabilities & $55,000$ & $51,400\backslash \backslash$

$\backslash$hline Bonds payable & $65,400$ & $66,400\backslash \backslash$

$\backslash$hline Total liabilities & $120,400$ & $117,800\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Stockholders$\text{'}$ equity$\}\backslash \backslash$

$\backslash$hline Common stock $(41,000$ shares$)$ & $114,000$ & $114,000\backslash \backslash$

$\backslash$hline Retained earnings & $42,000$ & $12,400\backslash \backslash$

$\backslash$hline Total stockholders' equity & $156,000$ & $126,400\backslash \backslash$

$\backslash$hline Total liabilities and stockholders' equity & $\backslash$$ $276,400$ & $\backslash$$ $244,200\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$