Balance Sheet:

Using the XYZ Balance Sheet and Income Statement linked in the Resources and the table provided below, complete the following for XYZ Inc.: 1. Calculate the indicated ratios for XYZ. 2. Construct the DuPont equation for both XYZ and the industry. 3. Use your analysis to outline XYZ's strengths and weaknesses. 4. Say XYZ hod doubled its sales as well as its inventories and common equity during 2013. Do you think this would this affect the validity of your ratio analysis? No calculations are necessary Ratio XYZ Inc. Industry Average Current 2.Ox 1.3x Quick Days sales outstanding 35 days Inventory turnover 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% XYZ Inc.: Balance Sheet as of December 31, 2013 (in thousands) Cash $75,000 Accounts Payable $150,000 Receivables 300,000 Notes Payable 90,000 Inventories 125,000 Other current liabilities 110,000 Total current assets 500,000 Total Current Liabilities $350,000 Long-term debt 250,000 Net fixed assets 500,000 Common equity 400,000 Total assets $1,000,000 Total liabilities and equity $1,000,000 XYZ Inc.: Income Statement for Year Ended December 31, 2012 (in thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41.500 1.392.500 Gross Profit $215.000 Selling expenses 115.000 General and administrative expenses 30.000 Earning before interest and taxes (EBIT) $70,000 Interest expense 24,500 Earnings before taxes (EBT) $45.500 Federal and state income taxes (40%) 18,200 Net income $27,300