complete the financial ratios table that appears below for TTC. Ratios for 2020 have already been calculated for your use as check figures. The market value ratios are provided for your reference. Follow the rounding and format conventions used in 2020.

Answer the following questions:

1. Toro's ROE has declined over the last 5 years. Use the DuPont identity to identify why this occurred. Identify and discuss specific problem areas that contributed to this decline based on other ratios from the table. (at least 3 paragraphs)
2. Discuss the trend in Toro's ability to pay interest on debt. Why has this occurred? Use ratios from the table to support your discussion. (at least 2 paragraphs)
3. Based on market value measures, does Toro's common stock appear to be overvalued or undervalued? What is the basis for your opinion? Assuming you had the necessary funds, would you buy Toro's stock? Why or why not? Use ratios from the table to support your decision. (at least 4 paragraphs)

5-Year Average Current 2020 2019 2018 2017 2016 1.89 1.03 0.63 0.61 1.56 2.56 12.86 15.63 1.65 Liquidity measures: Current ratio Quick ratio Cash ratio Long-term solvency measures: Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Interest bearing debt/EBITDA Asset management measures: Inventory turnover Days' sales in inventory Receivables turnover Days' sales in receivables Total asset turnover Profitability measures: Profit margin EBITDA margin Return on assets (ROA) Return on equity (ROE) Market value measures: EPS 3.21 113.56 12.94 28.21 1.18 9.76% 15.34% 11.56% 29.57% $2.10 $3.06 31.30 $2.57 31.49 $2.56 22.35 PE ratio 24.72 $2.47 27.07 11.27 27.16 $2.55 27.87 10.03 16.86 8.23 9.16 8.84 11.00 9.90 20.65 16.09 19.78 13.11 15.95 14.81 9.76% Market-to-book ratio Enterprise value/EBITDA DuPont decomposition of ROE: Profit margin x Total asset turnover = Return on assets (ROA) x Equity multiplier = Return on equity (ROE) --- 1.18 11.56% 2.56 29.57% B E $ $ $ 2020 3,378,810 $ 2,097,096 91,940 1,189,774 $ 763,417 426,357 $ (33,156) 13,869 407,070 $ 77,369 329,701 $ 107,698 $ 2019 3,138,084 $ 2,002,423 87,698 1,047,963 $ 722,934 325,029 $ (28,835) 25,939 322,133 $ 48,150 273,983 $ 96,133 $ 2018 2,618,650 $ 1,616,362 61,277 941,011 $ 567,926 373,085 $ (19,096) 18,408 372,397 $ 100,458 271,939 $ 85,031 $ 2017 2,505,176 $ 1,519,353 64,986 920,837 $ 565,727 355,110 $ (19,113) 17,187 353,184 $ 85,467 267,717 $ 75,758 $ 2016 2,392,175 1,453,483 64,097 874,595 540,199 334,396 (19,336) 15,400 330,460 99,466 230,994 65,890 $ $ $ 2020 2019 2018 2017 2016 $ 1 Income Statements 2 Fiscal Years Ended October 31 3 Net sales 4 Cost of goods sold 5 Depreciation and amortization 6 Gross profit 7 Selling, general and administrative expense 8 Earnings before interest and taxes 9 Interest expense 10 Other income, net 11 Earnings before taxes 12 Provision for income taxes 13 Net income 14 Dividends paid 15 16 Balance Sheets 17 Fiscal Years Ended October 31 18 ASSETS 19 Cash and cash equivalents 20 Total receivables, net 21 Inventories, net 22 Prepaid expenses and other current assets 23 Total current assets 24 Property, plant and equipment, net 25 Goodwill 26 Other intangible assets, net 27 Other assets 28 Total long-term assets 29 Total assets 30 31 LIABILITIES AND STOCKHOLDERS' EQUITY 32 Accounts payable 33 Accruals 34 Total current liabilities 35 Long-term debt 36 Long-term lease liabilities 37 Deferred income taxes 38 Other long-term liabilities 39 Total long-term liabilities 40 Common stock, par value $1.00 per share 41 Retained earnings 42 Accumulated other comprehensive loss 43 Total stockholders' equity 44 Total liabilities and stockholders' equity 45 $ 479,892 $ 261,135 652,433 34,188 1,427,648 $ 467,919 424,075 408,305 125,281 1,425,580 $ 2,853,228 $ 151,828 $ 268,768 651,663 50,632 1,122,891 $ 437,317 362,253 352,374 55,712 1,207,656 $ 2,330,547 $ 289,124 $ 193,178 358,259 54,076 894,637 $ 271,459 225,290 105,649 73,949 676,347 $ 1,570,984 $ 310,256 $ 183,073 328,992 37,565 859,886 $ 235,230 205,029 103,743 89,899 633,901 $ 1,493,787 $ 273,555 163,265 307,034 35,155 779,009 222,038 194,782 108,093 83,596 608,509 1,387,518 $ $ $ 319,230 $ 357,826 677,056 $ 700,813 256,575 $ 276,060 532,635 $ 312,549 211,752 $ 283,786 495,538 $ 331,887 174,668 266,687 441,355 353,907 $ 363,953 $ 391,971 755,924 $ 791,123 66,641 70,435 54,277 982,476 $ 107,583 1,041,507 (34,262) 1,114,828 $ 2,853,228 $ . $ 50,579 42,521 793,913 $ 106,742 784,885 (32,049) 859,578 $ 2,330,547 $ 26,306 30,578 369,433 $ 105,601 587,252 (23,937) 668,916 $ 1,570,984 $ 26,487 22,783 381,157 $ 106,883 534,329 (24,120) 617,092 $ 1,493,787 $ 11,830 30,391 396,128 108,427 480,044 (38,436) 550,035 1,387,518 $ $ 5-Year Average Current 2020 2019 2018 2017 2016 1.89 1.03 0.63 0.61 1.56 2.56 12.86 15.63 1.65 Liquidity measures: Current ratio Quick ratio Cash ratio Long-term solvency measures: Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Interest bearing debt/EBITDA Asset management measures: Inventory turnover Days' sales in inventory Receivables turnover Days' sales in receivables Total asset turnover Profitability measures: Profit margin EBITDA margin Return on assets (ROA) Return on equity (ROE) Market value measures: EPS 3.21 113.56 12.94 28.21 1.18 9.76% 15.34% 11.56% 29.57% $2.10 $3.06 31.30 $2.57 31.49 $2.56 22.35 PE ratio 24.72 $2.47 27.07 11.27 27.16 $2.55 27.87 10.03 16.86 8.23 9.16 8.84 11.00 9.90 20.65 16.09 19.78 13.11 15.95 14.81 9.76% Market-to-book ratio Enterprise value/EBITDA DuPont decomposition of ROE: Profit margin x Total asset turnover = Return on assets (ROA) x Equity multiplier = Return on equity (ROE) --- 1.18 11.56% 2.56 29.57% B E $ $ $ 2020 3,378,810 $ 2,097,096 91,940 1,189,774 $ 763,417 426,357 $ (33,156) 13,869 407,070 $ 77,369 329,701 $ 107,698 $ 2019 3,138,084 $ 2,002,423 87,698 1,047,963 $ 722,934 325,029 $ (28,835) 25,939 322,133 $ 48,150 273,983 $ 96,133 $ 2018 2,618,650 $ 1,616,362 61,277 941,011 $ 567,926 373,085 $ (19,096) 18,408 372,397 $ 100,458 271,939 $ 85,031 $ 2017 2,505,176 $ 1,519,353 64,986 920,837 $ 565,727 355,110 $ (19,113) 17,187 353,184 $ 85,467 267,717 $ 75,758 $ 2016 2,392,175 1,453,483 64,097 874,595 540,199 334,396 (19,336) 15,400 330,460 99,466 230,994 65,890 $ $ $ 2020 2019 2018 2017 2016 $ 1 Income Statements 2 Fiscal Years Ended October 31 3 Net sales 4 Cost of goods sold 5 Depreciation and amortization 6 Gross profit 7 Selling, general and administrative expense 8 Earnings before interest and taxes 9 Interest expense 10 Other income, net 11 Earnings before taxes 12 Provision for income taxes 13 Net income 14 Dividends paid 15 16 Balance Sheets 17 Fiscal Years Ended October 31 18 ASSETS 19 Cash and cash equivalents 20 Total receivables, net 21 Inventories, net 22 Prepaid expenses and other current assets 23 Total current assets 24 Property, plant and equipment, net 25 Goodwill 26 Other intangible assets, net 27 Other assets 28 Total long-term assets 29 Total assets 30 31 LIABILITIES AND STOCKHOLDERS' EQUITY 32 Accounts payable 33 Accruals 34 Total current liabilities 35 Long-term debt 36 Long-term lease liabilities 37 Deferred income taxes 38 Other long-term liabilities 39 Total long-term liabilities 40 Common stock, par value $1.00 per share 41 Retained earnings 42 Accumulated other comprehensive loss 43 Total stockholders' equity 44 Total liabilities and stockholders' equity 45 $ 479,892 $ 261,135 652,433 34,188 1,427,648 $ 467,919 424,075 408,305 125,281 1,425,580 $ 2,853,228 $ 151,828 $ 268,768 651,663 50,632 1,122,891 $ 437,317 362,253 352,374 55,712 1,207,656 $ 2,330,547 $ 289,124 $ 193,178 358,259 54,076 894,637 $ 271,459 225,290 105,649 73,949 676,347 $ 1,570,984 $ 310,256 $ 183,073 328,992 37,565 859,886 $ 235,230 205,029 103,743 89,899 633,901 $ 1,493,787 $ 273,555 163,265 307,034 35,155 779,009 222,038 194,782 108,093 83,596 608,509 1,387,518 $ $ $ 319,230 $ 357,826 677,056 $ 700,813 256,575 $ 276,060 532,635 $ 312,549 211,752 $ 283,786 495,538 $ 331,887 174,668 266,687 441,355 353,907 $ 363,953 $ 391,971 755,924 $ 791,123 66,641 70,435 54,277 982,476 $ 107,583 1,041,507 (34,262) 1,114,828 $ 2,853,228 $ . $ 50,579 42,521 793,913 $ 106,742 784,885 (32,049) 859,578 $ 2,330,547 $ 26,306 30,578 369,433 $ 105,601 587,252 (23,937) 668,916 $ 1,570,984 $ 26,487 22,783 381,157 $ 106,883 534,329 (24,120) 617,092 $ 1,493,787 $ 11,830 30,391 396,128 108,427 480,044 (38,436) 550,035 1,387,518 $ $