Can you help me to understand what needed from this question ?

Can you help me to understand what needed from this question ? 

P2-24 Integrative—Complete ratio analysis Given the following financial statements

(below and on page 96), historical ratios, and industry averages, calculate Sterling

Company's financial ratios for the most recent year. (Assume a 365-day year.)

Analyze its overall financial situation from both a cross-sectional and a time-series

viewpoint. Break your analysis into evaluations of the firm's liquidity, activity, debt,

profitability, and market.

Sterling Company

Income Statement

for the Year Ended December 31, 2009

Sales revenue $10,000,000

Less: Cost of goods sold 7,500,000

Gross profits $ 2,500,000

Less: Operating expenses

Selling expense $300,000

General and administrative expenses 650,000

Lease expense 50,000

Depreciation expense 200,000

Total operating expense 1,200,000

Operating profits $ 1,300,000

Less: Interest expense 200,00

Net profits before taxes $ 1,100,000

Less: Taxes (rate = 40%) 440,000

Net profits after taxes $ 660,000

Less: Preferred stock dividends 50,000

Earnings available for common stockholders 610,000

Earnings per share (EPS) $3.05

Sterling Company

Balance Sheet

December 31, 2009

Assets Liabilities and Stockholders' Equity

Current assets Current liabilities

Cash $ 200,000 Accounts payableb $ 900,000

Marketable securities 50,000 Notes payable 200,000

Accounts receivable 800,000 Accruals 100,000

Inventories 950,000  Total current liabilities 1,200,000

Total current assets $ 2,000,000 Long-term debt (includes financial leases) 3,000,000

Gross fixed assets (at cost)a $12,000,000 Stockholders' equity

Less: Accumulated depreciation Preferred stock (25,000 shares, $2 dividend) $ 1,000,000

Net fixed assets $ 9,000,000 Common stock (200,000 shares at $3 par)d 600,000

Other assets