Using the income statement and balance sheet from Question 4, calculate the following ratios for 2019. (16 marks) Current ratio Quick (acid-test) ratio Debt ratio Inventory turnover (Inventory ending balance 2018: $51,000) Accounts receivable turnover (use sales revenue for calculation, AR balance 2018: $28,000) Gross Profit percentage Return on total assets (Total assets 2018: $306,400) Return on equity (Shareholders Equity 2018 $199,300)

Compare and discuss based on the industry averages given below. Consideration should be given to: Companys ability to pay their debts. Discuss each ratio that is relevant to the ability to pay debt. How is the company at collecting their Accounts Receivable and selling their inventory compared to the industry average. What does the gross profit percentage represent for the company? How do they compare to the industry average? How profitable is the company at using their assets? How much income is being generated for every dollar of invested by common shareholders?

Industry averages: Current ratio 2.50 Quick (acid-test) ratio 1.25 Debt ratio - 0.30 Inventory turnover 6.00 Accounts receivable turnover 21.00 Gross Profit percentage 35% Return on total assets 10% Return on equity 15%