Chapter 2 Spreadsheet Problem Financial Statement Analysis Find below Cary Corporation's forecasted financial statements and the industry average financial ratios. a. Calculate Cary's forecasted financial ratios. b. Compare the estimated financial ratios for Cary Corporation with the industry average financial ratios and indicate strengths and weaknesses regarding liquidity (Quick and Current ratios), asset management (Days Sales Outstanding and Turnover ratios), indebtedness (Debt ratio), and profitability (Return, Profit, and P/E ratios) of Cary Corporation with respect to the industry. Cary Corporation: Forecasted Balance Sheet as of December 31 Cary Corporation: Forecasted Income Statement Miscellaneous Earnings before taxes (EBT) Taxes (40%) Net income Number of shares outstanding (134,000) Per-Share Data EPS Cash dividends per share $4.71 P/E ratio $0.95 Market price (average) 5.0 Industry Financial Ratios a Quick ratio $23.57 Current ratio 1.0 Inventory turnover b 2.7 Industry Financial Ratios a Quick ratio Current ratio 2.7 Inventory turnover b 5.8x Days sales outstanding Fixed assets turnover Total assets turnover b 2.6 Return on assets 9.1% Return on equity 18.2% Debt ratio 50.0% Profit margin on sales 3.5% P/E ratio 6.0 "Industry average ratios have been constant for the past four years. b Based on year-end balance sheet figures