Balance Sheet 2015 2019 2020 2021 Cash Accounts Receivable Inventory Total Current Assets 34000 136000 170000 340000 51000 204000 255000 510000 23800 231200 425000 680000 16000 323000 688500 1027500 Land and Building Machinery Other Fixed Assets Total Fixed Assets Total Assets 51000 68000 40800 159800 499800 40800 125800 23800 190400 700400 108800 98600 6800 214200 894200 102000 85000 10500 197500 1225000 Notes Payable, bank Accounts and Notes Payable Accruals Total Current Liabilities Mortgage - Long-term liab. Total Liabilities 74800 34000 108800 51000 159800 81600 40800 122400 37400 159800 85000 129200 47600 261800 34000 295800 238000 250900 54600 543500 29000 572500 Common Stock Retained Earnings Total S.Equity Total Liabilities & Equity 306000 34000 340000 499800 306000 234600 540600 700400 306000 306000 292400$ 346 500 598400 652500 894200 1225000 Income Statement 2019 2020 2021 Net Sales Cost of Goods Sola Gross Operating Profit 2220000 1768000 452000 2305000 1836000 469000 2400100 1904000 496100 General Administrative, Selling Depreciation Miscellaneous EBT Taxes (50%) Net Income 170000 68000 34000 180000 85000 05 187000 85000 71400 125600 57800 57 en 204000 102000 102000 88100 34000 50 Questions: 1) Calculate the key financial ratios for Seal-best, Inc., and plot trends in the firm's ratios against the industry averages. Plot does not actually require graphs, as the data points over three years will suffice 2) What strengths and weaknesses are revealed by the ratio analysis? 3) What amount of internally-generated funds would be available for the retirement of the loan? If the bank were to grant the additional credit and extend the increased loan from a due date of February 1 to June 30, would the company be able to retire the foon on June 30? (Hint: To answer this question, consider profits and depreciation as well as the amount of inventories and receivables that would be carried it Seal-best's inventory turnover and average collection period (Days Sales Outstanding) were at industry average levels, that is, generating funds by mducing inventories and receivables to industry averages. See again Lecture 4C for help.) . 4) in 2021. Seal-best's return on equity was 8.29 percent, versus 18 percent for the industry. Use the duPont equation to calculate and pinpoint the factors causing Soal-bost to fall so far below the industry average. You need to show both tho duPont relationships for the company and the Industry, and compare the elements of the equation. . 5) On the basis of your financial analysis, do you believe that tho bank should grant the additional loan and extend the entire line of credit to Juno 307 Support your position! 6) If the credit extension is not made, what alternatives are open to Seal-best? What can they do to survive? - 7) Under what circumstances is the validity of comparativo ratio analysis questionable? Figure 3 Dairy Products Industry Ratios (2021) (a) Quick Ratio 1.0 Current Ratio 2.7 Inventory Turnover 7 times Average Collection Period 32 days Fixed Asset Turnover (b) 13.0 times Total Asset Turnover (b) 2.6 times Return on Total Assets 9% Return on Equity 18% Debt (Total) Ratio 50% Profit Margin on Sales 3.5% (a) Industry average ratios have been constant for the past three years. (b) Based on year-end balance sheet figures