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Company: XYZ Corporation Financial Data for 2023 (in $000): Item Amount Cash 15,000 Accounts Receivable 25,000 Inventory 50,000 Prepaid Expenses 10,000 Total Current Assets 100,000

Company: XYZ Corporation

Financial Data for 2023 (in $000):

Item

Amount

Cash

15,000

Accounts Receivable

25,000

Inventory

50,000

Prepaid Expenses

10,000

Total Current Assets

100,000

Property, Plant & Equipment

200,000

Total Assets

300,000

Accounts Payable

20,000

Short-term Debt

25,000

Other Current Liabilities

15,000

Total Current Liabilities

60,000

Long-term Debt

100,000

Equity

140,000

Total Liabilities and Equity

300,000

Income Statement for 2023 (in $000):

Item

Amount

Sales

500,000

Cost of Goods Sold

300,000

Gross Profit

200,000

Operating Expenses

100,000

Interest Expense

20,000

Net Income Before Taxes

80,000

Taxes

16,000

Net Income

64,000

Requirements:

  1. Calculate the Current Ratio and Quick Ratio.
  2. Compute the Debt to Asset Ratio.
  3. Determine the Gross Profit Margin and Net Profit Margin.
  4. Calculate the Return on Assets (ROA) and Return on Equity (ROE).
  5. Discuss how the profitability ratios can influence investor decisions.

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