ANSWER QUESTION 1 A-L

Bob Builder Construction Company (BBCC) is a large firm for kitchen appliance manufacturers. The consolidated income statement and balance sheet of BBCC are as follows. Mr. Person, the finance manager of BBCC, submitted a justification to support the application for a short-term loan from the Queensville Interstate Bank (QIB) to finance increased sales. You are the loan officer at QIB responsible for determining whether BBCC's business is strong enough to be able to repay the loan. Using the attached Income Statement and Balance Sheet, accomplish the following: 1) Calculate the following profitability ratios for 2018 and 2019, compare with the industry averages shown in parentheses, and indicate if the company is doing better or worse than the industry and whether the performance is improving or deteriorating in 2019 as compared to 2018 (The industry average ratio is provided in parentheses) a) Gross profit margin (50 percent) b) Operating profit margin ( 15 percent) c) Net profit margin (8 percent) d) Return on assets (10 percent) e) Return on equity ( 20 percent) f) Current ratio (1.5) g) Quick ratio (1.0) h) Debt to total asset ratio (0.5) i) Times interest earned (25) j) Average collection period (45 days) k) Inventory turnover (8) 1) Total asset turnover (1.6) Bob Builder Construction Company (BBCC) is a large firm for kitchen appliance manufacturers. The consolidated income statement and balance sheet of BBCC are as follows. Mr. Person, the finance manager of BBCC, submitted a justification to support the application for a short-term loan from the Queensville Interstate Bank (QIB) to finance increased sales. You are the loan officer at QIB responsible for determining whether BBCC's business is strong enough to be able to repay the loan. Using the attached Income Statement and Balance Sheet, accomplish the following: 1) Calculate the following profitability ratios for 2018 and 2019, compare with the industry averages shown in parentheses, and indicate if the company is doing better or worse than the industry and whether the performance is improving or deteriorating in 2019 as compared to 2018 (The industry average ratio is provided in parentheses) a) Gross profit margin (50 percent) b) Operating profit margin ( 15 percent) c) Net profit margin (8 percent) d) Return on assets (10 percent) e) Return on equity ( 20 percent) f) Current ratio (1.5) g) Quick ratio (1.0) h) Debt to total asset ratio (0.5) i) Times interest earned (25) j) Average collection period (45 days) k) Inventory turnover (8) 1) Total asset turnover (1.6)