QUESTIONS 1. Using the financial statements provided for S&S Air, calculate each of the ratios listed in the table for the light aircraft industry. 2. Mark and Todd agree that a ratio analysis can pro- vide a measure of the company's performance. They have chosen Boeing as an aspirant company. Would you choose Boeing as an aspirant company? Why or why not? There are other aircraft manufacturers S&S Air could use as aspirant companies. Discuss whether it is appropriate to use any of the following companies: Bombardier, Embraer, Cirrus Air- craft Corporation, and Cessna Aircraft Company, own and fly their own airplanes. The company has two models the Birdie, which sells for $103.000, and the Eagle, which sells for $178,000 Although the company manufactures aircraft, its operations are different from commercial aircraft companies. S&S Air beilds aircraft to order. By using prefabricated parts, the com- pany can complete the manufacture of an airplane in only five weeks. The company also receives a deposit on cach order, as well as another partial payment before the order is complete. In contrast, a commercial airplane may take one and one-half to The years to manufacture once the order is placed. Mark and Todd have provided the following financial state- ments Chris has gathered the industry ratios for the light air plane manufacturing industry SES AIR, INC 2018 Income Statement Sales Cost of goods sold Other expenses Depreciation EBIT Interest Taxable income Taxes (254 Net income Dividends Add to retained earnings $46.298,115 34,536.913 5,870.855 2.074 853 $ 3.815,484 725.098 $ 3.090.386 772.597 $ 2.317.789 $ 705.000 1.612.789 Assets Current assets Cash Accounts receivable Inventory Total current assets SESA INC 2013 Ece Sheet Liabilities and Equity Current abilities $ 524 963 Accounts payable $ 1,068,356 843.094 Notes payable 2.439,553 1.235.161 Total current liabilities $ 3.507909 $ 2.603 218 Long-term debt $ 6.300.000 Fixed assets Net plant and equipment $20 381.945 Shareholder equity Common stock Retained earnings Total equity Total Babies and equity $ 460.000 12,717254 $13.177.254 $22.985.163 Total assets $22.985.163 Upper Quartie 1.89 .62 39 1.38 10.89 Light Airplane Industry Ratios Lower Quartile Medan Current ratio 50 1.43 Quick ratio 21 35 Cash ratio 08 21 Total asset turnover .68 85 Inventory turnover 4.89 6.15 Receivables turnover 6.27 9.82 Total debt ratio 52 Debt-equity ratio .68 1.08 Equity multiplier 1.68 2.08 Times interest earned 5.18 8.06 Cash coverage ratio 5.84 9.41 4.05% 5.10% 6.05% 9.53% 9.93% 15.145 14.11 Profit margin Return on assets Return on equity 61 1.56 256 9.83 10.27 7.15% 13.21% 19.15%