(Financial statement analysis)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.

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	$2,020	$1,490
Accounts receivable	4490	6020
Inventories	1500	2510
Current assets	$8,010	$10,020
Net fixed assets	16030	24990
Total assets	$24,040	$35,010
Accounts payable	$2,490	$5,000
Accrued expenses	960	1480
Short-term notes payable	3550	1530
Current liabilities	$7,000	$8,010
Long-term debt	8050	3960
Owners' equity	8990	23040
Total liabilities and owners' equity	$24,040	$35,010
Income Statement ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Net sales (all credit)	$47,970	$70,000
Cost of goods sold	(35,960)	(42,010)
Gross profit	$12,010	$27,990
Operating expenses	(8,000)	(11,960)
Net operating income	$4,010	$16,030
Interest expense	(1,180)	(520)
Earnings before taxes	$2,830	$15,510
Income taxes (40%)	(1,132)	(6,204)
Net income	$1,698	$9,306

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