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QUESTION 3 (20 marks) A) The balance sheet and income statement for the J. P. Robard Mfg. Company are as follows: (12 marks) Balance Sheet ($000) Cash $ 500 Accounts receivable 2,000 Inventories m Current assets 3,500 Net xed assets 44% Total assets $8,000 Accounts payable $1,100 Accrued expenses 600 Short-term notes payable Current liabilities $2,000 Long-term debt 2,000 Owners' equity M Total liabilities and owners' equity w Income Statement ($000) Net sales (all credit) Cost of goods sold Gross prot Operating expenses (includes $500 depreciation) Operating income Interest expense Earnings before taxes Income taxes (40%) Net income A) Calculate and interpret the nancial ratios for 2019 corresponding to the industry norms provided as follows: INDUSTRY NORMS Current ratio 1.5: 1 Inventory turnover 3 it Total asset turnover 1 3: Operating prot margin 18% Operating income return on investment 18% Debt ratio 60% Average collection period 100 days Fixed asset turnover 1.5 :1 Return on equity 15% B) The company is applying for Bank Loan. Write a report to Gulf Bank PLC whether you recommend the bank for sanction of Loan. (4 marks,250 words) C) Would you recommend investment in this company? Similar companies pay 12% return. Calculate any other ratio you think appropriate. Write a report. (4 marks,250 words)