Abiproffy company entered an expansion program and encounter a large loss in 2019, rather than the expected profit. As a result, its managers, directors, and investors are concerned about the firm's survival. James Brown was brought in as assistant to Abiproffy's chairman, who had the task of getting the company back into a sound financial position. Brown must make an analysis of where the company is now, what it must do to regain its financial health, and what actions to take. Your assignment is to help him answer the following questions. Provide clear explanations, not yes or no answers. Use the recent and projected financial information attached and answer the questions below.

1. Calculate the projected profit margin, operating profit margin, basic earning power (BEP), return on assets (ROA), and return on equity (ROE). What can you say about these ratios?

2, Calculate the projected inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. How does Abiproffy's utilization of assets stack up against other firms in its industry?

3. Calculate the projected current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company's liquidity position and its trend?

4. Calculate the projected debt ratio, the debt-to-equity ratio, liabilities-to-assets ratio, earnings multiplier, times-interest-earned, and EBITDA coverage ratios. How does Abiproffy compare with the industry with respect to financial leverage? What can you conclude from these ratios?

5. Calculate the projected price/earnings ratio and market/book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company?

6. It is commonly recommended that the managers of a firm compare the performance of their firm to that of its peers. Increasingly, this is becoming a more difficult task. Explain some of the reasons why comparisons of this type can frequently be either difficult to perform or produce misleading results.

Week 2 produce misleading results. Balance Sheets 2018 2019 2020E Assets Cash and equivalents $ 60 $ 50 $ 60 Short-term investments 100 10 50 Accounts receivable 400 520 530 Inventories 620 820 660 Total current assets $1,180 $1,400 $1,300 Net Fixed Assets 2,900 3,500 3,700 Total Assets - $4,080 $4,900 $5,000 Liabilities and equity 2018 2019 2020E Accounts payable $ 300 $ 400 $ 330 Notes payable 50 250 100 D 4 0 11:06 acer F D @ # % A & 2 3 5 8 9 O22 https/my post edw/CMCPortal Conter J Search Results | Course Hero X C https:/post.blackboard.com/ultra/courses/_120887_1/cl/outline . .. X BUS522 31_Financial Tools for Managers_2022 23_TERMS Week 2 Accruals 200 240 Total current liabilities 270 $ 550 $ 890 Long-term bands $ 700 800 1.100 Total liabilities 1.100 $1,350 $1.990 $1.800 Common stock (100,000 shares 1,000 1.000 1,000 Retained earnings 1.730 1.910 2.200 Total common equity $2.730 $2.910 $3.200 Total liabilities and equity $4.080 $4.900 $5.000 Note: "E" denotes the "estimated forecast." Income Statements 2018 2019 2020E Net sales $5,500 $6,000 56.600 Cost of goods sold (Excluding depr.) 4,300 4,800 5.210 Depreciation 290 320 370 Other operating expenses 350 420 400 D D 11:07 acer Ohttps://post.blackboard.com/ultra/courses/_120887_1/cl/outline X BUS522_31_Financial Tools for Managers_2022_23_TERM5 Week 2 Other operating expenses 350 420 Earnings before interest and taxes (EBIT) 400 $ 560 $ 460 Less interest $ 620 68 108 Pre-tax earnings 100 $ 492 $ 352 Taxes (25%) $ 520 123 88 130 Net Income $ 369 $ 264 $ 390 Note: "E" denotes the "estimated forecast." Also, Abiproffy has no amortization. Other Data 2018 2019 2020E Per Share Information EPS $3.69 $2.64 $3.90 DPS $0.90 50.84 $1.00 Book Value Per Share $27.30 $29.10 $32.00 Additional Information Dividends $90 $84 $100 M D W 4 9 0 11:07 acer C O- X C a https://post.blackboard.com/ultra/courses/_120887_1/cl/outline . . . X BUS522_31_Financial Tools for Managers_2022_23_TERMS Week 2 Additional information Dividends $90 $84 $100 Additions to retained earnings $279 $180 $290 Year-end shares outstanding 100 100 100 Year-end common stock price $50.00 $30.00 $49.00 Lease payments $20 $20 $20 Tax rate 25% 25% 25% Note: "E" denotes the "estimated forecast." Submission: Submit electronically by Sunday of week 2 at 11:59 pm EST M 4 0 11:07 acer C O