$1.$ Use the balance sheet for the representative Adams County farm found in module

$8$ to answer the following questions.

a$.$ Estimate the current ratio, working capital, debt$-$equity, and debt$-$to$-$asset

ratio projected for December $31,2022($second column$).$

i Current ratio

ii Working capital

iii Debt$-$equity ratio

iv Debt$-$to$-$asset ratio

b$.$ Use the ratios to analyze the financial strength $($liquidity and solvency$)$ of

the farm.

c$.$ The farmer is contemplating purchasing a piece of land in December for

$$450,000$ with a $$50,000$ down payment and financing the remainder using

a $10-$year loan. The principal payment for the coming year would be

$$17,600.$ Make the necessary changes to the $$Ending Balance$$ column of

the balance sheet $($the $$Beginning Balance$$ column would be unchanged$).$

Print the spreadsheet. What is the impact of the proposed purchase on the

current ratio and the debt$-$to$-$asset ratio? Does the land purchase improve

or diminish the liquidity and solvency of the farm business?

$2.$ Use the income statement for the Adams Co$.$ Farm located in Module $9$ to answer

the following questions. From the balance sheet, the average total assets for the

year was $$3,595,298$ and the average owner equity was $$2,790,119.$ The manager

values his own labor provided during the year at $$60,000$ and his management

services at $$30,000.$

a$.$ Calculate the following measures of profitability

i$.$ Return to equity

ii$.$ Rate of return on equity

iii. Return to assets

iv$.$ Rate of return on assets