The Jimenez Corporation's forecasted 2011 financial statements follow, along with some industry average ratios.

a. Calculate Jimenez's 2011 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses.

b. What do you think would happen to Jimenez's ratios if the company initiated cost-cutting measures that allowed it to hold lower levels of inventory and substantially decreased the cost of goods sold? No calculations are necessary: Think about which ratios would be affected by changes in these two accounts.

Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2011

Jimenez Corporation: Forecasted Income Statement for2011

Assets $ 72,000 439,000 Cash Accounts receivable Inventories 894,000 $1,405,000 431,000 $1,836,000 Total current assets Fixed assets Total assets Liabilities and Equi ty Accounts and notes payable S 432,000 170,000 $ 602,000 404,290 575,000 254,710 $1,836,000 Accruals Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity