The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.)

2016
Sales revenue	$210,000
Cost of goods sold	125,000
Net income	16,300
Dividends	2,600
Earnings per share	8.15

Hi-Tech Instruments, Inc. Balance Sheet
(Thousands of Dollars)	Dec. 31, 2016	Dec. 31, 2015
Assets
Cash	$26,300	$18,000
Accounts receivable (net)	38,000	41,000
Inventory	39,500	43,700
Total current assets	103,800	102,700
Plant assets (net)	52,600	50,500
Other assets	15,600	13,800
Total assets	$172,000	$167,000
Liabilities and Stockholders' Equity
Notes payable-banks	$6,000	$6,000
Accounts payable	22,500	18,700
Accrued liabilities	16,500	21,000
Total current liabilities	45,000	45,700
9% Bonds payable	32,000	40,000
Total liabilities	77,000	85,700
Common stock, $25 par value (2,000,000 shares)	50,000	50,000
Retained earnings	45,000	31,300
Total stockholders' equity	95,000	81,300
Total liabilities and stockholders' equity	$172,000	$167,000

Industry Average Ratios for Competitors
Quick ratio	1.3
Current ratio	2.4
Accounts receivable turnover	5.9 times
Inventory turnover	3.5 times
Debt-to-equity ratio	0.73
Gross profit percentage	42.8 percent
Return on sales	4.5 percent
Return on assets	7.6 percent

Calculate the company's debt-to-equity ratio for 2016.

Round answer to two decimal places.

Answer

Compare the result to the industry average.

Hi-Tech Instruments' ratio is higher than the industry average.

Hi-Tech Instruments' ratio is lower than the industry average.

Answer rating: 100% (QA)

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