6. [Liquidity Rotios and Cash Bum or Build) The Nio Products Company was started in 2011. The company manufactures components for personal decision assistant (PDA) products and for other hand-held electronic products. A difficult operating year 2012 was followed by a profitable 2013. However, the founders (Claire and Rob Nio) are still concerned about the venture's liquidity position and the amount of cash being used to operate the firm. Following are income statements ond balance sheets for the Nio Products Company for 2012 and 2013.4 VA ZUZ VIGEZVE e NIO PRODUCTS COMPANY Income Statement 2012 2013 Net Sales $900,000 $1,500,0004 Cost of Goods Sold 540,000 900,000 Gross Profit 360,000 600,000 Marketing 90,000 150,000 General & Administrative 250,000 250,000 Depreciation 40,000 40,000 EBIT -20,000 160,000 Interest 45,000 60,000 Earnings Before Taxes -65,000 100,000+ Income Taxes 0 25,000 Net Income (Loss) -$65,000 $75,000 e Balance Sheet 2012 2013 Cash $50,000 $20,000 Accounts Receivables 200,000 280,000 Inventories 400,000 500,000 Total Current Assets 650,000 800,000 Gross Fixed Assets 450,000 540,000 Accumulated Depreciation 100,000 -140,000 Net Fixed Assets 350,000 400,000 Total Assets $1,000,000 $1,200,000 Accounts Payable Accruals Bank Loan Total Current Liabilities Long-Term Debt Common Stock ($.05 par) Additional Paid-in-Capital Retained Earnings Total Liab. & Equity $130,000 50,000 90,000 270,000 300,000 150,000 200,000 80,000 $1,000,000 $160,000 70,000 100,000 330,000 400,000 150,000 200,000 120,000 $1,200,000 [ROA Model and Expenses Related to Soles] e A. Calculate the net profit margin in 2013 and the sales-to-total-assets ratio using yearend data Net profit margin 2013: Sales-to-total-assets 2013: B. Use your calculations from Part A to determine the rate of return on assets for 2013 Rate of retum on assets 2013