2 Financial statement Analysis (20 marks) The statements for S&H Industries are presented below. S&H Industries Balance Sheet for December 31 2020 and 2021 Accounts receivable Titl Land 20.000 Buildings and 70,000 12.500 16,000 $2000 28.000 10.000 T T 1.62.000 1112.500 $150.000 Accounts paya $10.500 $22.000 Short-tem bank notes 17.000 127,500 $69.000 Long d 28.750 22950 Common stock 31.500 31,500 S&H Induce Datener or the Year Ended December 31, 2020 and 2021 Cost of goods sold Gross profit Operating expenses Fixed caping x 3.21.000 $12.500 Depreciation $ 4.500 Total coating exper Earrings before intend Emings before taxes T $125.000 $160,000 $50,000 $64.000 $ 21,000 16,000 $12.000 11000 $0,000 $17.000 10000 4500 a. Based on the preceding statements, complete the following table: (10 marks) Current ratio Add-testratio Average colection period Debratio Operating promin Total asset turnover Operating on Reum on common t ty INDUSTRY AVERAGES ACTUAL 2000 ACTUAL 201 1.80 0.70 37.00 2.50 58.00% 1.14 140 b. Evaluate the firm's financial position at the end of 2021 in terms of liquidity. || The statements for S & H Industries are presented below: S&H Industries Balance Sheet for December 31 2020 and 2021 Cash Accounts receivable Inventories Total current assets Land Buildings and equipment 2020 2021 $ 9,000 $ 500 12,500 29.000 16,000 45.500 $ 50,500 $ 62,000 20,000 26,000 70,000 100,000 Less accumulated depreciation (28.000 (38.000) Total fixed assets Total assets $ 62.000 $112.500 $ 88.000 $150.000 Accounts payable Short-term bank notes Total current liabilities Long-term debt Common stock Retained earnings Total debt and equity $ 10,500 17.000 $ 27,500 28,750 31,500 24 750 $112.500 $ 22,000 47.000 $ 69,000 22,950 31,500 26.550 $150.000 S&H Industries Income Statement for the Years Ended December 31, 2020 and 2021 Sales (all credit] Cost of goods sold Gross profit 2020 $125,000 75.000 $ 50,000 2021 $160,000 96.000 $ 64,000 Operating expenses Fixed cash operating expenses $ 21,000 Variable operating expenses $ 12,500 Depreciation $ 4,500 $ 21,000 16,000 10.000 Total operating expenses $ 38.000 $ 47.000 Earnings before interest and taxes $ 12,000 $ 17,000 Interest expense Earnings before taxes Taxes Net Income $ 3.000 $ 6.100 $ 9,000 $ 4.500 10,900 $ 5.450 $ 4.500 $ 5.450 a. Based on the preceding statements, complete the following table: (10 marks) S&H Industries Ratio Analysis Current ratio Acid-test ratio Average collection period INDUSTRY AVERAGES ACTUAL 2020 ACTUAL 2021 1.80 0.70 37.00 Inventory turnover Debt ratio Times interest earned Operating profit margin 2.50 58.00% 3.80 10.00% Total asset turnover 1.14 Fixed asset turnover Operating return on assets 1.40 11.40% Return on common equity 9.50%