CHOICES FOR RATIO COMMENT: (STRONG OR WEAK)-COMPARED TO INDUSTRY AVERAGE

Comprehensive Ratio Analysis The Jimenez Corporation's forecasted 2019 financial statements follow, along with some industry average ratios. Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2019 Assets Cash $ 72,000 Accounts receivable 439,000 Inventories 894,000 Total current assets $1,405,000 Fixed assets 431,000 Total assets $1,836,000 Liabilities and Equity Accounts payable $ 332,000 Notes payable 106,000 Accruals 164,000 Total current liabilities $ 602,000 Long-term debt 403,330 Common stock 575,960 Retained earnings 254,710 Total liabilities and equity $1,836,000 Jimenez Corporation: Forecasted Income Statement for 2019 Sales Cost of goods sold (excluding depreciation) Selling, general, and administrative expenses Depreciation Earnings before taxes (EBT) Taxes (40%) Net income $4,290,000 3,580,000 378,320 151,000 $ 180,680 72,272 $ 108,408 $ 4.71 $ 0.95 Jimenez Corporation: Per Share Data for 2019 EPS Cash dividends per share P/E ratio Market price (average) Number of shares outstanding 4.0 18.85 $ 23,000 Industry Ratiosa Quick ratio 1.0 Current ratio 2.7 Inventory turnoverb 7.0 Days sales outstanding 32.0days Fixed assets turnoverb 13.0 Total assets turnoverb 2.6 Return on assets 9.1% Return on equity 18.2% Profit margin on sales 3.5% Debt-to-assets ratio 21.0% Liabilities-to-assets ratio 50.0% P/E ratio 5.0 Price/Cash flow ratio 3.5 Market/Book ratio 3.5 Notes: Industry average ratios have been stable for the past 4 years. bBased on year-end balance sheet figures. Calculation is based on a 365-day year. Calculate Jimenez's 2019 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses. Assume that there are no changes from the prior period to any of the operating balance sheet accounts. Do not round intermediate calculation. Round DSO to the nearest whole number. Round the other ratios to one decimal place. Ratios Firm Industry Comment Quick ratio 1.0 -Select- Current ratio 2.7 -Select- 7.0 -Select- v Inventory turnover Days sales outstanding days 32 days -Select- Fixed assets turnover 13.0 -Select- v Total assets turnover 2.6 -Select- v Return on assets % 9.1% -Select- v Return on equity % 18.2% -Select- Profit margin on sales % 3.5% -Select- Debt ratio % 21.0% -Select- Liabilities-to-assets % 50.0% -Select- v EPS $4.71 n.a. Stock Price $23.57 n.a. P/E ratio 5.0 -Select- v Price/Cash flow ratio 3.5 -Select- v Market/Book ratio 3.5 -Select- So, the firm appears to be -Select-v managed