QUESTION ONE (20 Marks) A. Financial Statements. As you can see, someone has spilled ink over...

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QUESTION ONE (20 Marks) A. Financial Statements. As you can see, someone has spilled ink over some of the entries in the balance sheet and income statement of Nessa Corporation. Use the following information below to work out the missing entries:[15 Marks) Long-term debt ratio Times interest earned Current ratio Quick ratio Cash ratio Return on assets Return on equity Inventory turnover Average collection period 0.4 8.0 1.4 1.0 0.2 18% 41% 5.0 71.2 days INCOME STATEMENT (figures in millions of dollars) Net sales Cost of goods sold Selling, general, and administrative expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Tax Net income 10 20 108 *** 200 BALANCE SHEET (figures in millions of dollars) This Year Last Year Assets Cash and marketable securities Receivables 20 34 Inventories 26 Total current assets 80 Net property, plant, and equipment 25 Total assets 105 Liabilities and shareholders' equity Accounts payable 25 20 Notes payable 30 35 Total current liabilities 55 Long-term debt 20 Shareholders' equity 30 115 105 Total liabilities and shareholders' equity B. Differentiate between Horizontal (Trend) and Vertical (common size) analysis financial statements and how they are used for purposes of financial statement analysis. [5marks] QUESTION ONE (20 Marks) A. Financial Statements. As you can see, someone has spilled ink over some of the entries in the balance sheet and income statement of Nessa Corporation. Use the following information below to work out the missing entries:[15 Marks) Long-term debt ratio Times interest earned Current ratio Quick ratio Cash ratio Return on assets Return on equity Inventory turnover Average collection period 0.4 8.0 1.4 1.0 0.2 18% 41% 5.0 71.2 days INCOME STATEMENT (figures in millions of dollars) Net sales Cost of goods sold Selling, general, and administrative expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Tax Net income 10 20 108 *** 200 BALANCE SHEET (figures in millions of dollars) This Year Last Year Assets Cash and marketable securities Receivables 20 34 Inventories 26 Total current assets 80 Net property, plant, and equipment 25 Total assets 105 Liabilities and shareholders' equity Accounts payable 25 20 Notes payable 30 35 Total current liabilities 55 Long-term debt 20 Shareholders' equity 30 115 105 Total liabilities and shareholders' equity B. Differentiate between Horizontal (Trend) and Vertical (common size) analysis financial statements and how they are used for purposes of financial statement analysis. [5marks]