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ok Comprehensive Ratio Analysis Data for Lorena Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash $215,000 Accounts payable $ 601,866 Receivables 1,575,000 Notes payable 326,634 Inventories 1,145,000 Other current liabilities 542,000 Total current assets $2,935,000 Total current liabilities $1,470,500 Net fored assets 1,330,000 Long-term debt 1,068,750 Common equity 1,725,750 Total assets $4,265,000 Total liabilities and equity $4,265,000 Lozano Chip Company Income Statement for Year Ended December 31, 2018 (Thousands of Dollars) Sales $7,500,000 Cost of goods sold 6,375,000 Selling general, and administrative expenses 815,000 Eamnings before interest and taxes (EBIT) $ 310,000 Interest expense 111,631 Earnings before taxes (EBT) $ 198,369 Federal and state income taxes (40%) 79,348 Net income $ 119,021 a Calculate the indicated ratios for Lozano. Do not round intermediate calculations, Round your answers to two decimal places Ratio Lozano Industry Average Current assets/Current liabilities Days sales outstanding days 35.0 days COGS/Inventory 6.7 Sales/Fixed assets 12.1 3.0 Sales/Total assets 1.24 Net income/Sales 3.6% Net income/Total assets 9.0% Net income/Common equity 30.0% Total debt/Total assets Total liabilities/Total assets 60.0% -Calculation is based on 365-day year b. Use the extended DuPont equation to calculate ROE for both Loan and the industry. Do not round intermediate calculations, Round your answers to two decimal places For the firm, ROES TEOR lyje Federal and state income taxes (40%) 79,340 1119,021 Netcome 2. Calculate the indicated ratios for Lozano. Do not round intermediate calculations. Round your answers to two decimal places Ratio Lozano Industry Average Current assets/Current liabilities 2.0 Days sales outstanding days 35.0 days COG/Inventory 6.7 Sales/Fixed assets 12.1 Sales/Total assets 3.0 Net income/Sales % 1.2% Net income/Total assets 3.6% Net income/Common equity % 9.0% Total debt/Total assets 30.0% Total liabilities/Total assets 60.0% "Calculation is based on a 365-day year 1. Use the extended DuPont equation to calculate ROE for both Lozano and the industry. Do not round intermediate calculations. Round yout answers to two decimal places For the firm, ROES For the industry, RDE c. Outine Lozano's strengths and weaknesses as revealed by your analysis. The firm's days sales outstanding is more than twice as long as the industry average, indicating that the firm should Select credito enforce a Select stringent collection policy The total assets turnover ratio is well Select the industry average se sales should be select tel s both While the company's profit margin is Select than the industry average, its other profitability ratios are the compared to the industry.nat income should be select given the amount of equity and assets. Olen Qu21 Sam Test for Grading 35 PM 4/27/202 life