After studying the educational resources assigned in this module related to the analysis of the results of the company through financial reasons, solve the following problems. It is important that you include the procedure and briefly explain how you got each result. Keep in mind that the rubric also includes a criterion for evaluating the correct use of language, grammar, spelling and syntax.

River Valley Production Inc. seeks to increase its market share and improve its bottom line. The company takes as a starting point the current scenario and the results obtained in 2018 and 2019. Like other companies, River Valley uses financial ratios (ratios) as tools to analyze the results obtained at the end of the period. It considers the data presented in the financial statements below and analyzes the company's results based on financial ratios.

1. Use the financial statements to calculate the following financial ratios for the years 2018 and 2019

1.1 Current Ratio

1.2 Quick Ratio

1.3 Inventory Turnover Ratio

1.4 Days Sales Outstanding (DSO)

1.5 Assets Turnover Ratio

1.6 Return on Assets (ROA)

1.7 Return on Equity (ROE)

1.8 Return on Investment (ROI)

1.9 Profit Margin

1.10 Debt to Equity Ratio

1.11 Price/Earning Ratio

2. Argue how the liquidity of the company responds to the working capital necessary to meet its short-term debts and operating expenses.

3. Explain how efficient asset management responds to the company's sales achievement.

4. Interpret the results of the debt-to-equity ratio and how the company has managed debt over the past two years.

5. Calculate the Dupont formula and present reasons that justify the profitability of the company and motivate capital investment.

6. Explain the impact it has on financial ratios, if the company decides to reduce the cost of goods sold by the decrease in demand for products and restricted access to raw materials.

7. Contrast the company's 2019 financial ratios with the industry's financial ratios.

8. Taking into consideration the results obtained, what decisions should the manager and his team make to improve fiscal health and achieve the growth of the company?

Balance Sheet	2018	2019
Cash	$63,000	$201,000
Accounts Receivable	199,000	305,000
Marketable Securities	81,000	42,000
Inventories	441,000	455,000
Prepaids	5,000	9,000
Total Current Assets	789,000	1,012,000
Property, Plant, and Equipment, net	858,000	858,000
Total Assets	$1,647,000	$1,870,000
Account Payable	$150,000	$100,000
Accruals	101,000	95,000
Total Current Liabilities	$251,000	$195,000
Bonds Payable	405,000	575,000
Total Liabilities	656,000	770,000
Common Stocks	700,000	700,000
Retained Earnings	291,000	400,000
Total Stockholders Equity	991,000	1,100,000
Total Liabilities & Equity	$1,647,000	$1,870,000

Income Statement	2018	2019
Sales	$1,855,000	$2,150,000
Cost of Goods Sold	823,000	985,000
Gross Profit	1,032,000	1,165,000
Selling, General & Admin. Exp. (SG&A)	520,000	438,000
Depreciation	75,000	150,000
Earnings before Interest and Taxes (EBIT)	437,000	577,000
Interest Expense	38,000	45,000
Earnings before Taxes (EBT)	399,000	532,000
Taxes (35%)	139,650	186,200
Net Income	$259,350	$345,800

Datos por accin	2018	2019
Earning per Share (EPS)	$1.25	$3.00
Cash Dividends	$1.15	$2.10
Market Share (Price)	$8.00	$11.00
Ratio Price/Earning (P/E)	15.20 veces	8.03 veces
Outstanding Shares	25,000	25,000

Razones financieras de la industria	2019
Current Ratio	8.3 veces
Quick Ratio (Acid Test)	8.1 veces
Inventory Turnover Ratio	7
Days Sales Outstanding (DSO)	30 das
Assets Turnover Ratio	12 veces
Return on Assets (ROA)	8.1
Return on Equity (ROE)	17.25%
Return on Investment (ROI)	15.5%
Profit Margin	3.3%
Debt/Equity Ratio	50%
Price /Earning Ratio (P/E)	5.1 veces