Please help me solve the problem c,d, you don't need to solve ABD, thanks

+ u + 0 A) D EXHIBIT 3-6 EPI's RATIOS VS. INDUSTRY AVERAGES A D B Elvis Products International Ratio Analysis for 2015 and 2016 2 Industry 2016 2.70x 1.00x 7.00x 10.70x 33.64 days 11.20x 2.60% 9.95x 50.00% 20.00% 3 Ratio 2016 2015 4 Liquidity Ratios 5 Current Ratio 2.39x 2.33x 6 Quick Ratio 0.84x 0.85% 7 Efficiency Ratios 8 Inventory Turnover 3.89x 4.00x 9 A/R Tumover 9.58x 9.77x 10 Average Collection Period 37.59 days 36.84 days 11 Fixed Asset Tumover 10.67x 12 Total Asset Tumover 2.33x 2.34x 13 Leverage Ratios 14 Total Debt Ratio 58.45% 54.81% 15 Long-term Debt Ratio 25.72% 22.02% 16 LTD to Total Capitalization 38.23% 32.76% 17 Debt to Equity 1.41x 1.21x 18 LTD to Equity 61.90% 48.73% 19 Coverage Ratios 20 Times Interest Earned 1.97x 3.35x 21 Cash Coverage Ratio 2.23x 3.65x 22 Profitability Ratios 23 Gross Profit Margin 15.58% 16.55% 24 Operating Profit Margin 3.89% 6.09% 25 Net Profit Margin 1.15% 2.56% 26 Retum on Total Assets 2.68% 5.99% 27 Return on Equity 6.45% 13.25% 28 Retum on Common Equity 6.45% 13.25% 28.57% 1.00x 40.00% 2.50x 2.80x 17.50% 6.25% 3.50% 9.10% 18.20% 18.20% It is important to note that industry averages may not be appropriate in all cases. In many cases, it is probably more accurate to define the industry as the target company's most closely related competitors. This group is probably far smaller (maybe only three to five companies) than the entire industry as defined by the 4-digit SIC code. The newer 6-digit NAICS code improves, but doesn't eliminate, this situation. Problems a. c. 1. Copy the Big Rock Candy Mountain Mining financial statements from Problem 1 in Chapter 2 into a new workbook. Set up a ratio worksheet similar to the one in Exhibit 3-6, page 92, and calculate all of the ratios for the firm. b. Identify at least two areas of potential concern using the ratios. Identify at least two areas that have shown improvement. In 2016 the ROE increased. Explain, in words, why this increase occurred using the DuPont method from equation (3-29). Now use the extended DuPont method from equation (3-33). d. Big Rock Candy Mountain Mining has shown an accounting profit in each of the past two years. Calculate the economic profit for these years and compare it to net income. The WACC is 9%. Using Altmans model for privately held firms, calculate the Z-score for Mike Owjai Manufacturing. Does it appear that the firm is in imminent danger of bankruptcy? e. + u + 0 A) D EXHIBIT 3-6 EPI's RATIOS VS. INDUSTRY AVERAGES A D B Elvis Products International Ratio Analysis for 2015 and 2016 2 Industry 2016 2.70x 1.00x 7.00x 10.70x 33.64 days 11.20x 2.60% 9.95x 50.00% 20.00% 3 Ratio 2016 2015 4 Liquidity Ratios 5 Current Ratio 2.39x 2.33x 6 Quick Ratio 0.84x 0.85% 7 Efficiency Ratios 8 Inventory Turnover 3.89x 4.00x 9 A/R Tumover 9.58x 9.77x 10 Average Collection Period 37.59 days 36.84 days 11 Fixed Asset Tumover 10.67x 12 Total Asset Tumover 2.33x 2.34x 13 Leverage Ratios 14 Total Debt Ratio 58.45% 54.81% 15 Long-term Debt Ratio 25.72% 22.02% 16 LTD to Total Capitalization 38.23% 32.76% 17 Debt to Equity 1.41x 1.21x 18 LTD to Equity 61.90% 48.73% 19 Coverage Ratios 20 Times Interest Earned 1.97x 3.35x 21 Cash Coverage Ratio 2.23x 3.65x 22 Profitability Ratios 23 Gross Profit Margin 15.58% 16.55% 24 Operating Profit Margin 3.89% 6.09% 25 Net Profit Margin 1.15% 2.56% 26 Retum on Total Assets 2.68% 5.99% 27 Return on Equity 6.45% 13.25% 28 Retum on Common Equity 6.45% 13.25% 28.57% 1.00x 40.00% 2.50x 2.80x 17.50% 6.25% 3.50% 9.10% 18.20% 18.20% It is important to note that industry averages may not be appropriate in all cases. In many cases, it is probably more accurate to define the industry as the target company's most closely related competitors. This group is probably far smaller (maybe only three to five companies) than the entire industry as defined by the 4-digit SIC code. The newer 6-digit NAICS code improves, but doesn't eliminate, this situation. Problems a. c. 1. Copy the Big Rock Candy Mountain Mining financial statements from Problem 1 in Chapter 2 into a new workbook. Set up a ratio worksheet similar to the one in Exhibit 3-6, page 92, and calculate all of the ratios for the firm. b. Identify at least two areas of potential concern using the ratios. Identify at least two areas that have shown improvement. In 2016 the ROE increased. Explain, in words, why this increase occurred using the DuPont method from equation (3-29). Now use the extended DuPont method from equation (3-33). d. Big Rock Candy Mountain Mining has shown an accounting profit in each of the past two years. Calculate the economic profit for these years and compare it to net income. The WACC is 9%. Using Altmans model for privately held firms, calculate the Z-score for Mike Owjai Manufacturing. Does it appear that the firm is in imminent danger of bankruptcy? e