1. ABC Company provides the following balance sheet and income statement for the year of 2016.

ABC COMPANY

BALANCE SHEET

AS OF 31 DECEMBER, 2016

ASSETS	$
Current Assets:
Cash in hand	100,000
Inventory	90,000
Debtors	145,000
Total current assets	3,35,000
Non-Current Assets:
Building	1,290,000
Plant & Machinery	770,000
Vehicles	470,000
Total non-current assets	2,530,000
Total Assets	2,865,000
LIABILITIES
Current Liabilities:
Creditors	410,000
Tax Payables	20,000
Salary Payables	92,000
Total Current liabilities	5,22,000
Non-Current Liabilities:
Long term loan	10,00,000
Total Liabilities	15,22,000
OWNERS EQUITY:
Paid up capital	740,000
Retained Earning	543,000
Share premium	60,000
Total	1,343,000
Total Liabilities & Equity	2,865,000

ABC COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER, 2016

Net Sales	$ 900,000
Cost of goods sold	(550,000)
Gross profit	350,000
Operating Expenses	(90,000)
Earnings before interest and tax (EBIT)	260,000
Interest expense	(60,000)
Earning before tax	200,000
Tax (35%)	(70,000)
Earning after tax	130,000

Required:

a. Calculate the following ratios:

(i) Average payment period.

(ii) Average collection period.

(iii) Inventory turnover ratio.

(iv) Fixed assets turnover.

(v) Total assets turnover ratio.

(vi) Quick ratio.

(vii) Return on Equity

(viii) Interest coverage ratio

Note: Assume 360 days in a year.

b. Assuming that the industrial average for collection and payment period is 110 and 150 days respectively and fixed asset turnover is 40%, evaluate the performance of the ABC COMPANY based on your answer in part (a) above.