For ratio calculations (30 points) 2 points each except were noted

Higginbotham, INC

Balance Sheet ($000)

Assets	Liabilities and Stockholders Equity
Cash $ 1,500 Marketable Securities 2,500 Accounts Receivable 15,000 Inventory 33,000 Tot. Curr. Assets $52,000 Fixed Assets (net) 35,000 Total Assets $87,000	Accounts Payable $12,500 Notes Payable 12,500 Tot. Current Liab. $25,000 Long-term Debt 22,000 Total Liabilities $47,000 Common Stock (par) 5,000 Paid-in Capital 18,000 Retained Earnings 17,000 Total Stock Equity $40,000 Tot Liab. And Stockholder Equity $87,000

Higginbotham, INC

Income Statement ($000)

Sales (all on credit) $130,000

Cost of Good Sold 103,000

Gross Margin 27,000

Operating Expenses 16,000

Earnings before Interest and Taxes 11,000

Interest Expense 3,000

Earnings before Taxes 8,000

Taxes 3,000

Earnings After Taxes $ 5,000

Other Information:

Stock Price $9.50

Book Value per Share $8.00

Number of Shares 5,000,000

Use the Balance Sheet and Income Statement of Higginbotham, INC to answer the following:

1. Calculate the following market-based ratios
   1. Price-to-earnings ratio
   2. Market price to book ratio

2. Express the return on stockholders equity ratio as a function of the net profit margin, total asset turnover, and equity multiplier.