Instructions: In your text, go through Chapter 3 ST1 through ST5 (pages 104-105). Use the Excel file M2_Problem_Set_Excel Download M2_Problem_Set_Excelthat I provide and the formula sheet in the book to make the calculations. Be sure to use cell references. (50 pts) See Assigned Readings Related to Excel Basics for Problem Set for tutorials on entering formulas in Excel. Note: You can skip ST3. part D if you want with no penalty. Write one sentence (in the Excel File) next to each ratio you calculated in Question 1 describing what that number means in words. (50 pts) For example, if you calculate the average collection period as 40, you should write something like on average, it takes 40 days for Freemont Corporation to collect its accounts receivable.

Balance Sheet ($000) Ratios Calculation Assets Liabilities and Equity. Liquidity LiquidityCash $1,500 Accounts payable $12,500 Current Marketable securities $ 2,500 Notes payable $12,500 Quick Accounts receivable $5,000 Total current liabilities $25,000 Inventory $ 33,000 Long-term debt $ 22,000 Asset Management Total current assets. $ 52,000 Total liabilities $47,000 Average collection period Fixed assets (net) $ 35,000 Common stock (par value) $ 5,000 Inventory turnover Total assets $87,000 Contributed capital in excess of par $18,000 Fixed-asset turnover Retained earnings $ 17,000 Total asset turnover Total stockholders' equity. $ 40,000 Total liabilities and stockholders' equity $ 87,000 Financial Leverage Debt Income Statement ($000) Other Info Debt-to-equity Times interest earned Sales (all on credit) $ 30,000 Stock Price $9.50 Fixed charge coverage Cost of sales $ 103,000 Book value/share $8.00 Gross margin. $ 27,000 Number of shares 5,000 in thousands. Profitability Operating expenses* $ 16,000 Gross profit margin EBIT. $ 11,000 Net profit margin Interest. $ 3,000 Return on investment EBT $ 8,000 Return on stockholders' equity

Income Tax $ 3,000 EAT. $ 5,000 Market-based Price-to earnings * includes 200 in lease payments Market price-to-book