The financial statements of Zach Industries for the year ended December 31, 2012, follow.

a. Use the preceding financial statements to complete the following table. Assume the industry averages given in the table are applicable for both 2011 and 2012.

b. Analyze Zach Industries€™ financial condition as it is related to
(1) Liquidity,
(2) Activity,
(3) Debt,
(4) Profitability, and
(5) Market. Summarize the company€™s overall financialcondition.

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Zach Industries Income Statement for the Year Ended December 31, 2012 Sales reven Less: Cost of goods sold $160,000 106.000 S 54,000 Gross profits Less: Operating expenses S 16,000 10,000 1,000 10,000 37,000 S 17,000 Selling expense General and administrative expenses Lease expense Total operating expense Operating profits Net profits before taxcs Net profits after taxes Zach Industries Balance Sheet December 31, 2012 Less: Interest expense S 10,900 4,360 S 6,540 Less: Taxes Assets $ 500 1,000 25,000 Cash Accounts receivable Inventories 45 Total current assets Land Buildings and equipment $ 72,000 26,000 90,000 Net fixed assets Total assets $ 78,000 $150,000 Liabilities and Stockholders Equity Accounts payable Notes payable 22,000 Total current liabilities Long-term debt Common stock Retained earnings 69,000 22,950 31,500 Total liabilities and stockholders' equity $150,000 The firms 3,000 outstanding shares of common stock closed 2012 at a price of $25 per share. Ratio Industry average Actual 2011 Actual 2012 Current ratio Quick ratio Inventory turnover Average collection period3 Debt ratio Times interest carned ratio Gross profit margin Net profit margin Return on total assets Return on common equity Market/book ratio 1.80 0.70 2.50 1.84 0.78 2.59 37.5 days 65% 36.5 days 67% 3.8 4.0 38% 40% 3.5% 4,0% 9.5% 1.1 3.6% 4.0% 8.0% 1.2 Based on a 365-day year and on end-of-year figures