Note: Fill M&G Industries Ratio Analysis Table.

For each ratio include formula with math computes and the explanation of each result and the comparison between the result with the results of previous year and the industry.

How liquid is the firm?

Is management generating adequate operating profits on the firms assets?

How is the firm financing its assets?

Are the owners (stockholders) receiving an adequate return on their investment?

M & G Industries Balance Sheet For December 31, 2013 and 2014 2013 2014 $9,000 $ 500 16,000 45,500 Accounts receivable 12,500 29,000 Total current assets 20,000 Buildings and equipment Less: allowance for depreciation 26,000 100,000 38,000) Total fixed assets Total assets Accounts Payable Short-term bank notes 7,000 47,000 Total current liabilities Long-term debt Common stock Retained earnings 28,750 31,500 24,750 22,950 31,500 26,550 150,000 Total debt and equity M & G Industries Income Statement For the Years Ended December 31, 2013 and 2014 2013 2014 Sales (all credit) Cost of goods sold $125,000 $160,000 75,000 50,000 96,000 Gross proft Operating expenses Fixed cash operating expenses 21,000 12,500 4,500 21,000 16,000 10,000 47 Variable operating expenses Total operating expenses Earnings before interest and taxes Interest expense Earnings before taxes 12,000 3,000 6,100 10,900 4,500 4,500 Net income 450 a. Based on the preceeding statements, complete the following table: M & G Industries Ratio Analysis Industy Actua!Actual 2013 Current ratio Acid-test ratio Average collection period Inventory turnover Debt ratio Times interest earned Total asset turnover Fixed asset turnover Return on equity 1.80 37.00 3.80 1.40 9.5% b. Evaluate the firm's financial position using the "four