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e. What is Chem-Med's total debt-to-assets ratio in 20XW, 20XX, 20XY, and 20XZ? Is any trend evident in the four-year period? Does Chem-Med in 20XW have more or less debt than the average company in the industry? CHEM-MED COMPANY Income Statements 20XU-20XW (in thousands) Pro Forma Income Statements 20XU 20XV 20XW 20XX 20XY 20XZ $ 777 $3,051 $3,814 $5,340 $7,475 $10,366 2571 995 1,040 1,716 2,154 2,954 520 2,056 2,774 3,624 5,321 7,412 610 705 964 1,520 2,120 2,645 0 0 0 500 0 0 Net sales (all credit) Cost of goods sold. Gross profit... Selling, etc., expenses. Other income (expenses)* Operating profit... Interest expense... Income before tax.. Income taxes.. (40% in 20XV; 33% thereafter). (90) 1,351 1,810 2,604 3,201 4.767 11 75 94 202 302 434 (101) 1,276 1,716 2,402 2,899 4,333 0 510 566 793 957 1,430 Page 4 of 8 ABC AaBbcc AaBb CcDaRMANCE Het Hei res ing Sy Pane Net income. (3 101) S 766 $1,150 $1,609 $1,942 $2,903 Dividends paid. 0 0 0 0 0 0 Increase in retained earnings..... S (101) S 766 $1,150 $1,609 $1,942 $2,903 Average number of shares** 2,326 2,326 2,347 2,347 2,347 2,347 Earnings per share. ($0.04) $0.33 S0.49 $0.69 $0.83 $1.24 Other income trondinary garande 30.000 ha, the Shamreded TABLE 1 CHEM-MED COMPANY CHEM-MED COMPANY Balance Sheets (in thousands) Pro Forma Balance Sheets as of Dec. 31, years ended: 20XX 20XY 20XZ 20XU 20XV 20XW Assets S 124 $ 103 $ 167 $ 205 S422 S 101 100 409 564 907 1,495 2,351 Cash and equivalent.. Accounts receivable.. Inventories.......... Other current... Total current assets... 151 302 960 1,102 1,443 798 28 59 29 41 57 11 403 873 1,720 2,255 3,417 3,261 1,901 2,298 2,917 4,301 8,923 5,531 522 81 82 346 413 588 1,820 2,216 Property, plant, & equipment. Less: Accumulated amortization......... Property, plant, & equipment net.............. Other capital assets.. Total assets.... Liabilities 2,571 3,888 5,009 215 0 101 200 200 8,335 I 399 $11.995 $2,223 $3.190 $4,491 S6,343 $8.641 Page 5 of 8 $210 $ 405 S 551 $771 $1,080 SM1,512 Accounts payable..... Short-term debt... 35 39 42 59 82 135 Total current liabilities... 245 444 593 830 1.162 1,647 Long-term debt..... 17 19 21 27 50 17 Total liabilities......... 262 463 614 857 1,212 1,664 Equity 2,062 2,062 2,062 2,062 2,062 2,062 (101) 665 1,815 3,424 5,366 Common stock Retained earnings... Total equity. Total liabilities and equity. 1,961 2,727 3,877 S.486 7.428 18.269 10,331 S11,995 $2,223 $3.190 $4,491 S6,343 $8,640 TABLE 2 Biotechnology Industry Statistics - Median Company in Biological Produets 20XU 20XV 20XW Current ratio. Quick ratio. 2.3 2.5 1.2 2.4 1.1 1.3 Page 6 of 8 Inventory turnover.. 5.5 5.6 5.7 Total asset turnover. 1.15 1.16 1.18 Return on sales.. 4.00% 4.00% 5.00% 4.60% 4.64% 5.90% Return on assets.. 7.64% 8.44% 12.29% Return on equity... 0.40 0.45 0.52 Total debt to assets

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