III$)-$ Financial Ratios $($Points$,28)$

The following data is extracted from the financial statements prepared by $"$XYZ$"$ Company for the year $2022.$

Balance Sheet

$\backslash$table$[[$Assets$,,$Liabilities,$],[$Current Assets,,Current Liabilities,$],[$Cash$,60000,$Accounts Payable,$45000],[$Accounts Receivable,$40000,$Notes payable,$25000],[$Inventory$,80000,$Taxes payable,$30000],[$Supplies$,20000,$Total Current Liab,$100000],[$Total Current Assets,$200000,$Long$-$term Liab,$],[\backslash$table$[[$Fixed Assets$],[$Equipment$]],,$Long$-$term loan,$60000],[$Equipment$,{140000}_{?},$Total Liabilities,$160000],[,,\backslash$table$[[$ABC Co$.]],180000],[$Total Assets,$340000,$Total Liab & Equity,$340000]]$

Required:

i$)$ Liquidity Ratios $(8$ Points $-$ i &ii$)$

a$.$ Current ratios

b$.$ Quick ratio

ii$)$ If the Industry average for Current Ratio is $1$:$1$ and the Quick Ratio is $0\mathrm{.}8$:$1,$ how do you judge this Company's performance. Give your suggestion.

iii$)$ Efficiency Ratios $(10$ Points $-$ iii & iv$)$

a$.$ Inventory turnover

b$.$ Receivable turnover

c$.$ Asset turnover

iv$)$ How do you interpret the Inventory turnover if the industry average is $8$ times. If there is Low turnover what do you think it indicates?

v$)$ Profitability Ratios $(10$ Points $-$ v & vi$)$

a$.$ Gross profit margin

b$.$ Operating profit margin

c$.$ Net profit margin

vi$)$ Mention the two ways that businesses can increase the Gross profit Margin.