a. Use the preceding financial statements to complete the table below. Assume that the industry averages given Number of shares outstanding Price per share 3,000 25 Indus Actual 2018 Actual 2019 Zach Industries Ratio Analvsis Current ratio Quick ratio Inventory tumover Average collection period (days) Debt ratio Times interest earned Gross profit margin Net profit margin Return on total assets Return on common equitv Market/book ratio Average 1.80 0.70 2.50 37.5 65.0% 3.8 38% 3.5% 4.000 9.5% 1.1 1.84 0.78 2.59 36.5 67.0% 4.0 4000 3.6% 4.000 8.0% 1.2 Points Possible Step Instructions Start Excel. Download and open the workbook named Zutter_Problem_3-24_Start.xlsx In cell H55, by using cell references to the given data, calculate the current ratio. In cell H56, by using cell references to the given data, calculate the quick ratio. Note: Subtract the inventories from total current assets and divide by the total current liabilities In cell H57, by using cell references to the given data, calculate the inventory turnover In cell H58, by using cell references to the given data, calculate the average collection period in days In cell H59, by using cell references to the given data, calculate the average debt ratio. Note Be sure to use the total asset value from cell F32 In cell H60, by using cell references to the given data, calculate the times interest earned ratio In cell H61, by using cell references to the given data, calculate the gross profit margin In cell H62, by using cell references to the given data, calculate the net profit margin In cell H63, by using cell references to the given data, calculate the return on total assets. In cell H64, by using cell references to the given data, calculate the return on common equity. In cell H65, by using cell references to the given data, calculate the market/book ratio In cell G69, type either improved or deteriorated based on your assessment of the 10 12 company's ratios 13 In cell J69, type either inferior or superior based on your assessment of the company's ratios 14 In cell F70, type either may not be or will be based on your assessment of the company's ratios 15 In cell H72, type either improved or deteriorated based on your assessment of the company's ratios 16 In cell F73, type either increase or decrease based on your assessment of the company's ratios 17 In cell E74, type either increased or decreased based on your assessment of the company's ratios 18 In cell F77, type either improved or deteriorated based on your assessment of the company's ratios Points Possible Step Instructions 19 In cell J77, type either above or below based on your assessment of the company's ratios In cell G78, type either improved or deteriorated based on your assessment of the company's ratios In cell 178, type either above or below based on your assessment of the company's ratios. In cell H81, type either above or below based on your assessment of the company's ratios In cell D82, type either high or low based on your assessment of the company's ratios. In cell H82, type either superior or inferior based on your assessment of the company's 21 23 25 26 27 ratios In cell D84, type either higher or lower based on your assessment of the company's ratios In cell 184, type either superior or inferior based on your assessment of the company's ratios In cell 185, type either upward or downward based on your assessment of the company's ratios In cell E87, type either increase or decrease based on your assessment of the company's ratios 29 In cell G88, type either positive or negative based on your assessment of the company's ratios In cell C89, type either higher or lower based on your assessment of the company's ratios In cell E91, type either superior or inferior based on your assessment of the company's 30 31 ratios 32 In cell D92, type either payable or receivable based on your assessment of the company's ratios In cell F92, type either inventory or cash based on your assessment of the company's ratios Save the workbook. Close the workbook and then exit Excel. Submit the workbook as 34 directed. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition Liquiditv: Zach Industries' liquidity position has to the industry average. The firm from 2018 to 2019 and is able to satisfy short-term obligations as they come due Activitv: Zach Industries' ability to convert assets into cash has Examination into the cause of the Inventory turnover has also The firm may be holdimg slightly excessive mventory from 2018 to 2019 in the average collection period is warranted for the period under review and is fair compared to industry Debt: Zach Industries' debt position has average. Zach's ability to service interest payments has verage since 2018 and company debt level is and is the indus its industry average, net profit margin in Profitabilitv: Although Zach Industries' gross profit margin is indicating comparison to average The fim has investment and return on equity in comparison to the industry and shows a(n) cost of goods sold, the firm has a(n) than average operating expenses. The firm has a(n) return on trend Market: Zach Industries the firm's in its market price relative to their book value per share indicates that formance has been interpreted as more in 2019 than in 2018, and it is a little than the industry. Overall, the firm maintains of accounts profitability at the risk of illiquidity. Investigation into the management an is warranted
