a) ACC Ltd. has been in the construction business for the last twenty years. Recently they are facing a lot of competition from the other companies in the industry. Therefore, they are considering analyzing their comparative financial position within the construction Industry. Data for ACC Ltd. and its industry averages are as follows: (3+2=5 Marks)

Items	Amount ($)	Items	Amounts ($)
Cash	77,500	Accounts Payable	129,000
Total Operating Expense	185,000	Interest Expense	24,500
Income Tax	18,200	Total Sales	1,682,500
Net Fixed Assets	292,500	Long-term Bank Loan	256,500
Cost of Goods Sold	1,392,500	Common Stock Equity	361,000
Inventories	241,500	Other Current Liabilities	84,000
Accounts Receivables	336,000	Notes Payable (Maturity within 1 year)	117,000
Total Operating Profit	105,000	Net Profit after tax	62,300

Industry Average Ratios
Current ratio 3.5	Quick Ratio 1.8
Debt-to-Equity ratio 20%	Total Assets Turnover 2.00
Times interest earned 7	Net Profit margin 2.75%
Inventory turnover 10.5	Return on Total Assets 9%
Financial Leverage 2.35	Return on Equity 12.93%

1. Calculate the following ratios for ACC : 1) Net Profit Margin, 2) Total Asset Turnover 3) Financial Leverage/Equity Multiplier.
2. Based on the DuPont analysis, Identify the area where ACC needs to improve its performance.

b) Discuss specifically two reasons which may lead to the conflict of interest between shareholders and the manager. (3 Marks)