9,000 1. Use the information provided in the table to answer all parts of question 1. For ratios involving balance sheet items, just use the balances provide (i.e., you do not need to average beginning and end of year numbers). Balance Sheet on December 31, 2019 Assets Cash 25,000 Accounts Receivable 32,000 Prepaid Expenses Inventory 48,000 Long-Term Investments 70,000 Property and Equipment (net of accumulated 290,000 depreciation of 40,000 and 22,000) Goodwill 40,000 Total Assets 514,000 Liabilities and Shareholder's Equity Accounts Payable 29,000 Salaries Payable 70,000 Interest Payable 3,000 Current Portion of Long-Term Debt 10,000 Long-Term Debt 135,000 Contributed Capital 200,000 Retained Earnings 67,000 Total Liabilities and Shareholders' Equity 514,000 Income Statement for the Year Ending December 31, 2019 Sales 665,000 Cost of Products (340,000) Salary Expense (200,000) Other Expenses (12,000) Depreciation Expense (50,000) Loss on Sale of Investments (10,000) Interest Expense (12,000) Income Before Income Taxes 41,000 Income Tax Expense (12,300) Net income 28,700 a) What is Giants Co's Current Ratio? b) Why is the current ratio useful (i.e., what does it tell you about a firm)? c) How would Giant Co's Current Ratio be affected if it purchased inventory with cash? (i.e., increase, no change, decrease)? d) Calculate Giants Co's profit margin on sales, asset turnover ratio, and return on assets? e) Return on assets is a key measure of a firm's profitability. Firms can generate a high return on assets either by having a high profit margin on sales or by having a high asset turnover ratio. For what types of firms do you think a high asset turnover ratio is the primary driver of return on assets? Briefly explain why. (Note: You can provide examples of specific firms or just describe types of firms)