COMPREHENSIVE: FINANCIAL RATIOS ASSIGNMENT INSTRUCTIONS INSTRUCTIONS Use the following information to answer the questions on page 2 below: (note: all sales are credit sales) Compute each of the following ratios for 2019 and 2020 and indicate whether each ratio was getting "better" or "worse" from 2019 to 2020 and was "good" or "bad" compared to the Industry Avg in 2020 (round all numbers to 2 digits past the decimal place) 2019 $ Income Stmt info: Sales 5 less Cost of Goods Sold Gross Profit Operating Expenses Earnings before Interest & Taxes 1,100,000 450.000 650,000 330.000 320,000 25,000 295,000 118,000 177,000 2020 1,188,000 481,500 706,500 346,500 360,000 30,000 330,000 132.000 198,000 Interest eamings before Taxes Taxes Net Income 5 Getting "Good" or Better or 2020 "Bad" Getting Industry compared to 2019 2020 Worse? Avg Industry Avg Profit Margin 0.11 Current Ratio 1.90 Quick Ratio 1.12 Retum on Assets .28 Debt to Assets .55 Receivables tumover 18.00 Avg collection periodo 21.20 Inventory Turnover** 8.25 Retum an Equity 0.55 Times Interest Eamed 11.15 *Assume a 360 day year **Inventory Tumover can be computed 2 different ways. Use the formula listed in the text (the one the text indicates many credit reporting agencies generally use) 5 12/31/2019 60,000 80,000 $ $ Balance Sheet info: Cash Accoumts Receivable Inventory Total Current Assets Fixed Assets (Net) Total Assets 12/31/2020 72,000 81,600 135.000 288,600 315.000 $ 110.000 250,000 300,000 550.000 S $ $ | 3 603.600 $ $ $ Current Liabilities Long Term Liabilities Total Liabilities Stockholder's Equity Total Lisb & Equity 130,000 150,000 280,000 270,000 550.000 $ $ $ 139,100 183,000 322,100 $ $ 281,500 603,600 3