Please help me with this and pleae provide step-by-step calculations. RNA Inc. manufactures a variety of consumer products. The companys founders have run the company for 30 years and are now interested in retiring. Consequently, they are seeking a purchaser who will continue its operations, and a group of investors, Morgan Inc., is looking into the acquisition of RNA. To evaluate its financial stability and operating efficiency, RNA was requested to provide the latest financial statements and selected financial ratios. Summary information provided by RNA is as follows: RNA Inc. Income Statement For the Year Ended November 30, 2015 (in thousands) Sales (net): $30,500 Interest income: 500 Total Revenue: 31,000 Costs and expenses Cost of goods sold: 17,600 Selling & administrative expenses: 3,550 Depreciation & amortization expense: 1,890 Interest expense: 900 Total costs & expenses: 23,940 Income before taxes: 7,060 Income taxes: 2,800 Net income: $4,260 RNA, Inc. Balance Sheet As of November 30 (in thousands) 2015 2014 Cash: $ 400 $ 500 Short-term investments (at cost) 300 200 Accounts receivable (net) 3,200 2,900 Inventory 6,000 5,400 Total current assets 9,900 9,000 Property, plant & equipment (net) 7,100 7,000 Total assets $17,000 $16,000 Accounts payable $3,700 $3,400 Income taxes payable 900 800 Accrued expenses 1,700 1,400 Total current liabilities 6,300 5,600 Long-term debt 2,000 1,800 Total liabilities 8,300 7,400 Common stock ($1 par value) 2,700 2,700 Paid-in capital in excess of par 1,000 1,000 Retained earnings 5,000 4,900 Total stockholders equity 8,700 8,600 Total liabilities & stockholders equity $17,000 $16,000 Selected Financial Ratios RNA Inc. 2014 2015 Current Industry Average Current ratio 1.61 1.62 1.63 Acid-test ratio .64 .63 .68 Times interest earned 8.55 8.50 8.45 Profit margin on sales 13.2% 12.1% 13.0% Asset turnover 1.84 1.83 1.84 Inventory turnover 3.17 3.21 3.18

(a) Calculate a new set of ratios for the fiscal year 2015 for RNA based on the financial statements presented.

(b) Explain the analytical use of each of the six ratios presented, describing what the investors can learn about RNAs financial stability and operating efficiency.

( c ) Identify two limitations of ratio analysis.