The financial statements of Zaki 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 Zaki Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition.

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Zaki Industries Income Statement for the Year Ended December 31, 2012 Sales revenue Less: Cost of goods sold US$160,000 106,000 USS 54,000 Gross profits Less: Operating expenses USS 16,000 10,000 1,000 10,000 USS 37,000 USS 17,000 6,100 USS 10,900 4,360 USS 6,540 Selling expense General and administrative expenses Lease expense Depreciation expense Total operating expense Operating profits Net profits before taxes Net profits after taxes Less: Interest expense Less: Taxes Zaki Industries Balance Sheet December 31, 2012 Assets Cash Marketable securities Accounts receivable Inventories USS 500 1,000 25,000 45,500 USS 72,000 USS 26,000 90,000 Total current assets Land Buildings and equipment Less: Accumulated depreciation 38 Net fixed assets USS 78,000 US$150,000 Total assets Liabilities and Stockholders' Equit Accounts payable Notes pay USS 22,000 able Total current liabilities USS 69,000 USS 22,950 USS 31,500 USS 26,550 USS150,000 Long-term debt Common stock" Retained earnings Total liabilities and stockholders' equity Ratio Industry average Actual 2011 Actual 2012 1.84 0.78 2.59 Current ratio Quick ratio Inventory turnover Average collection period" Debt ratio Times interest earned ratio Gross profit margin Net profit margin Return on total assets Return on common equity Market/book ratico 1.80 0.70 2.50 37.5 days 36.5 days 65% 67% 3.8 4.0 38% 40% 3.5% 4.0% 9.5% 3.6% 4.0% 8.0% 1.2