Assess Yellow Hammer's income statement by calculating the sales growth, EBITDA profitability (EBITDA/Sales) and coverage ratios using EBIT and EBITDA for each year. SHOW YOUR WORK (5 points)2. Assess Yellow Hammer's balance sheet by calculating the leverage ratios using of Debt/Capitalization and Debt/EBITDA. SHOW YOUR WORK (5 points)3. If Yellow Hammer had reduced its DSO to 30 days in 2021 and used the funds saved to down short-term debt, what would be the new Debt/Cap and Debt/EBITDA ratios for 2021? SHOW YOUR WORK (5 points)

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Yellow Hammer Corporation Income Statement Year Ended December 31 (in $ millions) otal sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization Operating Income Interest income (expense) Pretax Income Taxes Net Income Dividend Retained Earnings 2021 207.0 144.9 62.1 24.8 8.2 2.0 27.1 10.8 16.2 4.1 12.2 2.4 9.7 2020 172.5 120.8 51.8 20.7 7.6 1.5 22.0 10.2 11.8 2.9 8.8 1.8 7.1 2019 150.0 105.0 45.0 18.0 6.4 1.0 19.6 8.0 11.6 2.9 8.7 Yellow Hammer Corporation Income Statement Year Ended December 31 (in $ millions) otal sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization Operating Income Interest income (expense) Pretax Income Taxes Net Income Dividend Retained Earnings 2021 207.0 144.9 62.1 24.8 8.2 2.0 27.1 10.8 16.2 4.1 12.2 2.4 9.7 2020 172.5 120.8 51.8 20.7 7.6 1.5 22.0 10.2 11.8 2.9 8.8 1.8 7.1 2019 150.0 105.0 45.0 18.0 6.4 1.0 19.6 8.0 11.6 2.9 8.7

Answer rating: 100% (QA)

1 Sales growth EBITDA profitability coverage ratios 2021 2020 ... View the full answer