Question 2: Using the XYZ Engineering Ltd. financial statements, calculate the financial ratios as indicated below and explain what each ratio result means. Please show all calculations and explanations at the bottom

XYZ Engineering Ltd. Balance Sheet as at December 31, 20XX ASSETS CURRENT ASSETS Cash Notes Receivable Prepaid Expenses Marketable Securities Inventory Total Current Assets $15,000 $4,500 LIABILITIES CURRENT LIABILITIES Short term bank loan Accounts Payable Total Current Liabilities $9,680 $6,545 $6,260 $5,000 $8,000 $19,500 $35,485 Fixed Assets Equipment Furniture Automobile Subtotal less: Depreciation Total Fixed Assets $31,000 $6,000 Long Term Liabilities Contracts Payable Shareholders Loan Total Long Term Liabilities Total Liabilities $28,240 $16,050 $15,000 $59,290 -$11,515 $37,000 $56,500 $47,775 Equity Share Capital Retained Earnings Total Equity $6,000 $20,760 $26,760 TOTAL ASSETS $83,260 TOTAL LIABILITIES & EQUITY $83.260 XYZ Engineering Ltd. Profit and Loss Statement for the period ending December 31, 20XX REVENUES Sales $275,000 EXPENSES Rent Wages Office Supplies Advertising Insurance Courier expenses Interest Utilities Depreciation $2,600 $25,000 $2,000 $2,000 $1,000 $2,000 $2,000 $300 $1,700 $38,600 Profit before taxes Income Taxes $236,400 -$28.950 Net Profit after taxes $207,450 Quick Ratio Debt to Equity Ratio Before tax profit margin After tax profit margin