SECTION B$.$ There are FOUR $(4)$ questions in this section. Answer ALL the questions

QUESTION $1$

The balance sheet and income statement for J$.$ P$.$ RObard Manufatcuring Company are as follows:

J$.$P$.$ Robard Manufacturing Company

Balance Sheet as at $31$ December $2018$

Item $($$ in thousands$)$

Cash

Account receivable

Inventory

Total current assets

Net fixed assets

Total assets

Accounts payable

Accrued expenses

Short$-$term notes payable

Total curernt liabilities

Long$-$term debt

Total common equity

Total liabilities and equity $500$

$2,000$

$1,000$

$3,500$

$4,500$

$8,000$

$1,100$

$600$

$300$

$2,000$

$2,000$

$4,000$

$8,000$

J$.$P$.$ Robard Manufacturing Company

Income Statement for the Year Ended December $31,2018$

Item $($$ in thousands$)$

Net sales

Cost of goods sold

Gross profit

Operating expenses $($includes $$500$ depreciation$)$

Net operating income

Interest expense

Earnings before taxes

Income taxes $(40\%)$

Net income $8,000$

$3,300$

$4,700$

$3,000$

$1,700$

$367$

$1,333$

$533$

$800$

Required:

a$)$ Calculate the following ratios from the above informations:

Total asset turnover

ROA

Inventory turnover

DSO

Times Interest Earned

b$)$ i$.$ Analyse each ratios as in $($a$)$ and compare with industry ratios as stated below.

Total asset turnover $15$ times

ROA $35\%$

Inventory turnover $25$ times

DSO $20$ days

Times Interest Earned $8$ times

$(3$ points x$1$m $=3$m$)$

ii$)$ Comment the constraints of Budi and recommend to the management how to improve the firm$$s performance based on the above ratios.