Question

Happy Hamburger Company (130 Points)

Below are the balance sheet and income statement for HappyHamburger Company.

Happy Hamburger Company
Balance Sheet as of December 31, 20XX
Assets			Liabilities and Shareholder Equity
Cash	78,000		Accounts payable	136,000
Accounts Receivable	336,500		Current portion of debt	82,500
Inventories	225,000		Other current liabilities	114,000
Total current assets	639,500		Total current liabilities	332,500
Net fixed assets	310,000		Long-term debt	252,000
Total assets	949,500		Total Liabilities	584,500
			Common equity	365,000
			Total Liabilities & Equity	949,500

Happy Hamburger Company
Income Statement for the year ending December 31,20XX
Sales	1,704,560
Cost of goods sold	1,489,000
Selling, general and administrative expenses	152,000
Earnings before interest and taxes (EBIT)	63,560
Interest expense	26,200
Earnings before taxes (EBT)	37,360
Federal and state income taxes (40%)	14,944
Net Income	22,416

Required:

1. Calculatethe following ratios for the company ( include formulas)

2. Explainwhether the company is doing better or worse than the industryaverage for each ratio.

	Happy Hamburger	Industry Average
Current ratio		1.7
Days sales outstanding (based on 365 day year)		36 days
Inventory turnover		7.3
Fixed asset turnover		12.1
Total asset turnover		3.00
Return on sales		3.20%
Return on assets		3.60%
Return on equity		9.00%
Debt ratio		71%

Use an Excel spreadsheet for your answers.