Copy the Big Rock Candy Mountain Mining financial statements from Problem 1 in Chapter 2 into a new workbook

. a. Set up a ratio worksheet similar to the one in Exhibit 3-6, page 92, and calculate all of the ratios for the firm.

b. Identify at least two areas of potential concern using the ratios. Identify at least two areas that have shown improvement.

c. In 2016 the ROE increased. Explain, in words, why this increase occurred using the DuPont method from equation (3-29). Now use the extended DuPont method from equation (3-33).

d. Big Rock Candy Mountain Mining has shown an accounting profit in each of the past two years. Calculate the economic profit for these years and compare it to net income. The WACC is 9%.

e. Using Altmans model for privately held firms, calculate the Z-score for Mike Owjai Manufacturing. Does it appear that the firm is in imminent danger of bankruptcy?