This problem Set is based on materials covered in module 1/week 1. It is designed for you to demonstrate your understanding of basic financial statements, financial statement analysis, break-even concepts, financial and operating leverages. Before you start this assignment, please review weeks 1 and 2 materials thoroughly. Finance date of Adams Stores, Inc. for the year ending 2016 and 2017. 2016 2017 $3,432,000 $5,834,400 9,000 7,282 340,000 720,000 203,768 97,632 323,432 1,000,000 2,864,000 4,980,000 18,900 116,960 48,600 20,000 491,000 1,202,950 62,500 176,000 100,000 100,000 8.50 6 351,200 632,160 145,600 324,000 715,200 1,287,360 200,000 720,000 146,200 263,160 Items Sales Cash Other Expenses Retained Earnings Long-term debt Cost of goods sold Depreciation Short-term investments Fixed Assets Interest Expenses Shares outstanding (par value = $4.60) Market Price of stock Accounts Receivable Accounts payable Inventory Notes Payable Accumulated Depreciation Accruals 136,000 284,960 Tax Rate 40% 40% Instructions: As a group, complete the following activities using the financial information above: Part 1: Financial Statements A. Prepare the income statement for 2016 and 2017. Include statement of retained earnings for 2017 B. Prepare the balance sheet for 2016 and 2017 C. Prepare Common-Size financial statements of income statement and balance sheet. D. Prepare Statement of Cash Flows

Part 2: Financial Statement Analysis A. Based on your financial statements (from Part 1), calculate the following ratios for the two years. Show all your calculations in good form. Show your formulas. If you use excel, each calculation need to show the excel formula

Current ratio

Quick ratio

Inventory turnover (times)

Average collection period (days)

Total asset turnover (times)

Debt ratio

Times interest earned

Gross profit margin

Net profit margin

Return on total assets

Return on equity

P/E ratio

Return on equity using DuPont Analysis

B. Comments on the ratios by comparing 2016 to 2017 ratios. C. Assume Adams Stores, Inc. is a retail company similar to WalMart, Myers, or Target. Compare 2017 ratios to the industry average. Please note that Adams Stores, Inc. is not a real company. To find comparable industry ratios, you need to search for industry ratios for retail. See information on Moodle for instructions on how to find industry ratios. Based on the industry average, how is Adams Stores, Inc. doing financially?

Can you please provide me answer for PART 2