The balance sheet and income statement for Chico Electronics are reproduced below (tax rate is 40%). PROBLEM 1-8 Financial Statement Ratio Analysis CHICO ELECTRONICS Balance Sheet ($ thousands) As of December 31 Year 4 Year 5 Assets Current assets Cash Accounts receivable Inventories.. Prepaid expenses $ 683 $325 1,490 3,599 1,415 2,423 15 13 Total current assets Property, plant and equipment, net Other assets Total assets 3,603 6,360 1,066 1,541 123 157 $4,792 $8,058 Liabilities and Shareholders' Equity Current liabilities Notes payable to bank. Current portion of long-term debt Accounts payable Estimated income tax liability Accrued expenses Customer advance payments Total current liabilities Long-term debt Other liabilities Total liabilities Shareholders' equity | $ 875 38 116 485 933 588 472 576 586 34 963 3,945 122 179 81 131 1,924 4,255 Common stock, $1.00 par value; 1,000,000 shares authorized; 550,000 and 829,000 outstanding, respectively 550 829 Preferred stock, Series A 10%, $25 par value: 25,000 authorized 20,000 and 18,000 outstanding, respectively 500 450 Additional paid-in capital.... 450 575 Retained earnings 1.368 1.949 Total shareholders' equity 2.868 3,803 Total liabilities and shareholders' equity $4,792 $8.058 CHICO ELECTRONICS Income Statement ($ thousands) For Years Ending December 31 Year 4 Year 5 Net sales.. $7,570 $12,065 Other income, net 261 345 Total revenues 7,831 12,410 Cost of goods sold 4,850 8,048 General, administrative, and marketing expense 1,531 2,025 Interest expense. 22 78 Total costs and expenses 6,403 10,151 Net income before tax 1,428 2,259 Income tax 628 994 Net income $ 800 $ 1,265 Required: Compute and interpret the following financial ratios of the company for Year 5: a. Acid-test ratio b. Return on assets CHECK (d) EPS, $1.77 c. Return on common equity d. Earnings per share e. Gross profit margin ratio f. Times interest earned g. Days to sell inventory h. Long-term debt to equity ratio i. Total debt to equity / Sales to end-of-year working capital