ASAP PLASE... Can you interpret? 
QUESTION 1: (Total 40 Points) Assume that you are finance director of Buterfly Inc. and Board of directors of Buterfly Inc. has already decided to buy a new factory building in order to expand the production capacity. According to financial budget of Buterfly Inc., the companyneeds totake loan from financialinstitution. Therefore, you have already given instructions your staffs to prepare all financial statements of the company. Because, you want to evaluate all financial statements before submittingto financial institutions. Your staffs have already prepared balance sheet income statment and cash flow statement of the company. Financial statements will be used to compute set of keyfinancial ratios forthe years 2016 and 2015 inorder to assertfinancial situation of Buterfly Inc. You can find financial statements below. REQUESTED: 1. Compute Liquidity Ratios: Short Tem Solvencyfor 2015 ve 2016 (5 points) a. Quick or Acid-Test Ratio b. Average Collection Period C. Days Inventory Held d. Cash Conversion Cycle Compute Leverage Ratios: Debt Financing and Coverage for 2015 and 2016 (5 points) a. Debt Ratio b. Long-Term Debtto Total Capitalization c. Debtto Equity d. Cash Interest Coverage Compute Profitability Ratios: Efficiency and Performance for 2015 and 2016 (10 points) III. a. Gross Profit Margin b. Operating Profit Margin c Net Profit Margin d. Cash Flow Margin Retum on Total Assests (ROA) or Return on Investment (ROI) f. Retum on Equity (ROE) IV. Disclose the financial situation of BUTERFLY INC. for the year of 2016 by using all your calculations (20 points) EINANCIALTABLES: A. Buterfly Inc Balance Sheets December 31, 2016 and 2015 ($, In Thousands) 2016 2015 10,386 8,350 36,769 759 56,264 ASSETS Current Assest Cash and Cash Equivalents 9,333 Accounts Receivable 8,960 Inventories 47,041 Prepaid Expenses and OtherA. 512 Total Current Assets 65,486 Fixed Assest Land 811 Buildings 18,273 Equipment 21,523 Depreciation and amortization (11,528) Goodwill 270 Other Assets 103 Total Fixed Assets 29,452 TOTAL ASSETS 95,298 811 11,928 13,768 (7,530) 270 398 19,645 75,909 LIABILITIES and S.H. EQUITY Short Term Liabilities Accounts Payable 14,294 Accrued Liabilities 4,137 Income Taxes Payable 1,532 Short Term Bank Debts Other Current Liabilities 1,884 Total Short Tem Uabilities 27,461 Long Term Llabilities Deffered FederalIncome Taxes 843 Long Term Bank Credits 21,059 Total Long Tem Labilities | 21,902 TOTAL LIABILITIES 49,363 7,591 4,366 947 6,012 1.516 20,432 5,614 635 16,975 17,610 38,042 Stock Holders Equity Common stock Retained Earnings TOTAL S.H EQUITY 5,760 40.175 45,935 5,504 32.363 37,867 3 B. Buterfly Inc. Income Statements for the Years Ended December 31, 2016 and 2015. ($, In Thousand Except per Share Amounts) NetSales Cost of Goods Sold GROSS PROFIT Selling and Adm. Expenses Advertising Depreciation and Amort. Impairment Changes OPERATING PROFIT Other Income (Expenses) Interest Income Interest Expense EARNINGS BEFORE INCOME TAX Provision for Income Taxes NET EARNINGS 2016 215,600 129,364 86,236 45,722 14,258 3,998 3,015 19,243 2015 153,000 91,879 61,121 33,493 10,792 2,984 2,046 11,806 422 (2,585) 17,080 838 (2,277) 10,367 7,686 9,394 4,457 5.910 2015 0 C. Buterfly Inc. Summary Analysis of Cash Flows (, in Thousands) 2016 Inflows (dollars in thousands) Operations 10,024 Other Investing Activities 295 Sales of Common Stock 256 Additions to Short Term Debt O Additions to Long Term Debt 5,600 TOTAL 16,175 Outflows(dollars in thousands) Operations 0 Purchase of property, plant,etc 14, 100 Reductions of short term debt 30 Reductions of long term debt 1,516 Dividends Paid 1,582 TOTAL 17,228 Change in cash and cash (1,053) equivalents 183 1,854 7.882 9.919 3,767 4,773 0 1,593 1.862 11,995 (2,076)
