1.ABC Inc. 2018 sales are $1,100,000.Operating costs (excluding depreciation) are 70% of sales.Net fixed assets are $205,000.Depreciation amounted to 15% of net fixed assets.Interest expenses are $100,000.The tax bill must be calculated using the corporate income tax table in the text, and ABC Inc. paid 8% of net income in dividends. ABC Inc.'s income statement for 2018: ABC Inc. Income Statement 2018 Sales Operating costs (excluding depreciation) EBITDA Depreciation EBIT Interest Expense EBT Taxes*** Net Income Common Dividends Addition to Retained Earnings Operating Cash Flow ***For Tax Rate use the corporate tax table in chapter 2 to determine the company's tax bill, average and marginal tax rates.Use the average tax rate for this portion of the income statement. Average tax ________ Marginal tax ________ 2.The financial statements for XYZ Inc. are shown below. Income Statement and other info: 2018 2017 Year-end stock price $50 $40 # of shares 5500 3500 XYZ Inc. Income Statement 2018 2017 Sales950,000 950000 800,000 COGS 650000 600000 Gross Profit 300000 200000 Operating costs (excluding depreciation)50,000 50000 60,000 EDITDA250,000 250,000 140000 Depreciation20,000 20000 18,000 EBIT230,000 230000 122,000 Interest Expense100,000 100000 100,000 EBT130,000 130000 22,000 Taxes25,000 25000 5,000 Net Income105,000 105,000 17,000 Common Dividends6,000 6000 4000 Addition to Retained Earnings99,000 99000 13,000 Balance Sheet Assets20182017 2018 2017 Cash and Cash Equivalents40,00030,000 40000 30000 Short term Investments4,5008,500 4500 8500 Accounts Receivable166,000190,000 166000 190000 Inventories80,00070,000 80000 70000 Total current assets290,500298,500 290500 298500 Net Fixed Assets115,00090,000 115000 90000 Total Assets405,500388,500 405500 388500 Liabilities and Equity20182017 2018 2017 Accounts Payable17,00014,500 17000 14500 Accruals18,50014,000 18500 14000 Notes Payable11,0004,000 11000 4000 Total Current Liabilities46,50032,500 46500 32500 Long term debt133,000186,950 133000 186950 Total Liabilities179,500219,450 179500 219450 Common Stock146,000130,000 146000 130000 Retained Earnings80,00039,050 80000 39050 Total Common Equity226,000169,050 226000 169050 Total Liabilities and Equity405,500388,500 405500 388500 a.Find all of the ratios below: 2018 IA Liquidity Ratios 3.5 Current Ratio 2 Quick Ratio Asset Management Ratios Inventory Turnover 25.39 Days Sales Outstanding 55.08 Total Assets Turnover 2.7 Debt Ratios Debt Ratio 35% TIE Ratio 6.5 Debt to Equity Ratio Profitability Ratios Profit Margin 12% Return on Assets 13.50% Return on Equity 15% Market Ratios EPS N/A P/E ratio 14.78 b.Give a synopsis on how this company compares with the industry in each section of ratios. c.Perform a DuPont analysis for XYZ Inc. ROE = PM * TA Turnover * Equity Multiplier 2018 2017 d.Explain the results in part c.