Chris Guthrie was recently hired by S&S Air, Inc., to assist the company with its financial planning and to evaluate the companys performance. Chris graduated from college five years ago with a finance degree. He has been employed in the finance department of a Fortune 500 company since then.

S&S Ai was founded 10 years ago by friends Mark and Sexton and Todd Story. The company has manufactured and sold light airplanes over this period, and the companys products have received high reviews for safety and reliability. The company has a niche market in that in sells primarily to individuals who own and fly their own airplanes. The company has two models: the Birdie, which sells for $53,000, and the Eagle, which sells for $78,000.

While the company manufactures aircraft, its operations are different from commercial aircraft companies. S&S Air builds aircraft to order. By using prefabricated parts, the company is able to complete the manufacture of an airplane in only five weeks. The company also receives a deposit on each order, as well as another partial payment before the order is complete. In contrast, a commercial airplane may take one and one-half to two years to manufacture once the order is placed.

Mark and Todd have provided the following financial statements, Chris has gathered the industry ratios for the light airplane manufacturing industry.

Answer the following questions. Please provide your answers in detail.

Compare the performance of S&S Air to the industry. For each ratio comment on why it might be viewed as positive or negative relative to the industry. (10 pts)

S&S AIR, INC. 2019 Balance Sheet Assets Liabilities and Equity Current assets Current liabilities Cash $ 481,852 S 944,698 Accounts receivable 2,025.778 Accounts payable Notes payable Total current liabilities 1.909,248 Inventory 1,634,820 $ 2,863.946 Total current assets $ 4.142.450 $ 5,060,000 Fixed assets Net plant and equipment $16.256,698 $ 190,000 Long-term debt Shareholder equity Common stock Retained earnings Total equity Total liabilities and equity 12.395.202 $12,485.202 Total assets $20.399,148 $20.399.148 S&S AIR, INC. 2019 Income Statement Sales $26,501,600 19,780,200 3,166,700 864.500 $ 2,690,200 Cost of goods sold Other expenses Depreciation EBIT Interest Taxable income Taxes (21%) Net income 479,200 $ 2,211,000 464.310 $ 1,746,690 Dividends $270,600 Additions to retained earnings 1,476,090 Light Airplane Industry Ratios Lower Quartile Median Upper Quartile -50 1.43 1.89 .64 .84 1.05 .08 .21 -39 .68 .85 1.13 4.89 6.15 10.89 6.27 9.82 11.51 -31 -52 .61 Current ratio Quick ratio Cash ratio Total asset turnover Inventory turnover Receivables turnover Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Profit margin Return on assets Return on equity -58 1.08 1.56 1.58 2.08 2.56 5.18 8.06 9.83 5.84 8.43 10.27 4.05% 6.75% 8.47% 6.05% 10.53% 13.21% 9.93% 16.54% 26.15%