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S&S AIR, INC. 2017 Income Statement
Sales		$46,298,115
Cost of goods sold		34,536,913
Other expenses		5,870,865
Depreciation		2,074,853
EBIT		$ 3,815,484
Interest		725,098
Taxable income		$ 3,090,386
Taxes (25%)		772,597
Net income		$ 2,317,789
Dividends	$ 705,000
Add to retained earnings	1,612,789

S&S AIR, INC. 2017 Balance Sheet
Assets		Liabilities and Equity
Current assets		Current liabilities
Cash	$ 524,963	Accounts payable	$ 1,068,356
Accounts receivable	843,094	Notes payable	2,439,553
Inventory	1,235,161	Total current liabilities	$ 3,507,909
Total current assets	$ 2,603,218
		Long-term debt	$ 6,300,000
Fixed assets
Net plant and equipment	$20,381,945	Shareholder equity
		Common stock	$ 460,000
		Retained earnings	12,717,254
		Total equity	$13,177,254
Total assets	$22,985,163	Total liabilities and equity	$22,985,163

Light Airplane Industry Ratios
	Lower Quartile	Median	Upper Quartile
Current ratio	.50	1.43	1.89
Quick ratio	.21	.35	.62
Cash ratio	.08	.21	.39
Total asset turnover	.68	.85	1.38
Inventory turnover	4.89	6.15	10.89
Receivables turnover	6.27	9.82	14.11
Total debt ratio	.41	.52	.61
Debt-equity ratio	.68	1.08	1.56
Equity multiplier	1.68	2.08	2.56
Times interest earned	5.18	8.06	9.83
Cash coverage ratio	5.84	9.41	10.27
Profit margin	4.05%	5.10%	7.15%
Return on assets	6.05%	9.53%	13.21%
Return on equity	9.93%	15.14%	19.15%

Compare the performance of S&S Air to the industry. Suppose you create an inventory ratio calculated as inventory divided by current liabilities. How do you think S&S Air's ratio would compare to the industry average?

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