only solution for 3-13 a is needed .

Inventory turnover ratio: 5.0 "Calculation is based on a 365-day year. Balance Sheet 60,000 Cash Accounts receivable Inventories Fixed assets Total assets Sales Accounts payable Long-term debt Common stock Retained earnings Total liabilities and equity Cost of goods sold 97,500 $300,000 (3-12). The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, an inventory sive Ratio turnover of 6 times, total current assets of $810,000, and cash and marketable securities alculations of $120,000. What were Kretovich's annual sales and its DSO? Assume a 365-day year. (3-13) Data for Morton Chip Company and its industry averages follow. ive Ratio Analysis a. Calculate the indicated ratios for Morton. b. Construct the extended Du Pont equation for both Morton and the industry. c. Outline Morton's strengths and weaknesses as revealed by your analysis. d. Suppose Morton had doubled its sales as well as its inventories, accounts receiv- able, and common equity during 2010. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.) Fundamental Concepts of Corporate Finance Morton Chip Company: Balance Sheet as of December 31, 2010 (Thousands of Dollars) Cash Receivables Inventories Total current assets Net fixed assets $ 77,500 336,000 241,500 $655,000 292,500 Accounts payable Notes payable Other current liabilities Total current liabilities Long-term debt Common equity Total liabilities and equity $129,000 84,000 117,000 $330,000 256,500 361,000 $947,500 Total assets $947,500 Morton Chip Company: Income Statement for Year Ended December 31, 2010 (Thousands of lars) Sales $1,607,500 Cost of goods sold 1,392,500 145,000 Selling, general, and administrative expenses $ Earnings before interest and taxes (EBIT) 70,000 Interest expense 24,500 $ 45,500 Earnings before taxes (EBT) Federal and state income taxes (40%) 18,200 Net income $ 27,300 $ Selling, general, and administrative expenses Earnings before interest and taxes (EBIT) Interest expense $ 70,000 24,500 45,500 18,200 27,300 Earnings before taxes (EBT) Federal and state income taxes (40%) Net income $ Morton Industry Average Ratio Current assets/Current liabilities Days sales outstanding Sales/Inventory Sales/Fixed assets Sales/Total assets Net income Sales Net income Total assets Net income/Common equity Total deb Total assets 2.0 35.0 days 6.7 12.1 3.0 1.2% 3.6% 9.0% 60.0% Calculation based on a 365-day year