Carson Electronics' management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheets and income statements for the two firms are found below

a. Calculate the following ratios for both Carson and BGT:

Current ratio Times interest earned Inventory turnover Total asset turnover Operating profit margin

Operating return on assets Debt ratio Average collection period Fixed asset turnover Return on equity

b. Analyze the differences you observe between the two firms. Comment on what you view as weaknesses in the performance of Carson as compared to BGT that Carson's management might focus on to improve its operations.

Balance Sheet ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Cash	$2,030	$1,450
Accounts receivable	4470	6020
Inventories	1490	2530
Current assets	$7,990	$10,000
Net fixed assets	16050	25020
Total assets	$24,040	$35,020
Accounts payable	$2,450	$5,010
Accrued expenses	1050	1500
Short-term notes payable	3480	1460
Current liabilities	$6,980	$7,970
Long-term debt	8050	3960
Owners' equity	9010	23090
Total liabilities and owners' equity	$24,040	$35,020

Income Statement ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Net sales (all credit)	$47,990	$70,000
Cost of goods sold	(36,020)	(42,030)
Gross profit	$11,970	$27,970
Operating expenses	(8,020)	(12,010)
Net operating income	$3,950	$15,960
Interest expense	(1,190)	(540)
Earnings before taxes	$2,760	$15,420
Income taxes (40%)	(1,104)	(6,168)
Net income	$1,656	$9,252