EZEE Supermarket Inc. has provided the following information: EZEE Supermarkets Inc. - Income Statements For the years 2019 and 2018 2019 2018 $ millions $ millions $ millions $ millions Sales revenue 18,083 17,236 Less: Cost of Goods sold 11,860 11,170 Gross Profits 6,223 6,066 Less: Operating expenses Selling expense AND General and administrative expenses 5,149 5,009 Other operating expenses 89 93 Depreciation expense Total operating expense 5,237 5,102 Operating profits (EBIT) 986 964 Less Interest expense 47 0 Plus other income 13 19 Net profits before taxes 951 983 Less: Taxes 368 383 Net profits after taxes 583 600 Less: Preferred stock dividends Earnings available for common stockholders 583 600 EZEE Supermarkets Inc. - Balance Sheets as at years ended 31st December: 2019 2018 $ millions $ millions $ millions $ millions ASSETS Current Assets Cash 980 581 Marketable securities 0 0 Accounts receivable 278 244 Inventory 595 560 Other current assets 419 344 Total current assets 2,271 1,729 Gross Fixed Assets Property plant and equipment (net) 3,958 3,543 Other long-term assets 1,063 1,158 5,021 4,701 Total gross fixed assets (at cost) Less: Accumulated depreciation Net fixed assets Total assets 5,021 7,292 4,701 6,430 353 330 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable Notes payable Other current liabilities Total current liabilities Long-term debt Total liabilities 1,189 1,072 1,542 2,042 3,585 1,402 806 2,209 1,043 1,934 Stockholders' Equity Preferred stock Common stockb,c,d Paid-in capital in excess of paron common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 2,665 2,287 3,708 7,292 4,221 6,430 "Other information" includes: Dividends paid in 2019 amount to $ 206 million The market price per share of common stock in 2019 was $32.60 and in 2018 was $35.45. Other useful industry average ratios: Current ratio 1.32:1 Quick (acid-test) ratio 0.76 times Inventory days 32.9 days Trade receivable days 7.5 days Trade payable days 17.1 days Total assets turnover 2.4 times Debt ratio 60.0% Debt/equity ratio 1.50 times Interest cover 4.3 times Gross profit margin 30.0% Operatinig profit margin 6.1% Net profit margin 2.1% Earnings per share (EPS) N/A Return on total assets (ROA)* 3.1% Return on Capital Employed 13.8% Price / Earnings (P/E) ratio 15.2 Note: Total assets turnover = Sales / Total assets Debt ratio = (Total liabilities / Total assets) x 100% Debt / equity ratio = Total liabilities / Common stock equity "Return on total assets (ROA) = Earnings available for common stockholders / Total assets Required: (a) Using the above information for EZEE Supermarkets Inc. showing your formula and showing your calculations, calculate and show for 2019 and 2018 relevant: i) Profitability ratio(s) ii) Liquidity ratio(s) iii) Efficiency ratio(s) (b) Using the results from 3.2)a), and the above information for: EZEE Supermarkets Inc., as well as the "Other information interpret your findings, giving a possible reason for any observed changes in each ratio. You may wish to include the industry averages for comparison. (c) Prepare a Statement of Cash Flows for the year ending 2019. EZEE Supermarket Inc. has provided the following information: EZEE Supermarkets Inc. - Income Statements For the years 2019 and 2018 2019 2018 $ millions $ millions $ millions $ millions Sales revenue 18,083 17,236 Less: Cost of Goods sold 11,860 11,170 Gross Profits 6,223 6,066 Less: Operating expenses Selling expense AND General and administrative expenses 5,149 5,009 Other operating expenses 89 93 Depreciation expense Total operating expense 5,237 5,102 Operating profits (EBIT) 986 964 Less Interest expense 47 0 Plus other income 13 19 Net profits before taxes 951 983 Less: Taxes 368 383 Net profits after taxes 583 600 Less: Preferred stock dividends Earnings available for common stockholders 583 600 EZEE Supermarkets Inc. - Balance Sheets as at years ended 31st December: 2019 2018 $ millions $ millions $ millions $ millions ASSETS Current Assets Cash 980 581 Marketable securities 0 0 Accounts receivable 278 244 Inventory 595 560 Other current assets 419 344 Total current assets 2,271 1,729 Gross Fixed Assets Property plant and equipment (net) 3,958 3,543 Other long-term assets 1,063 1,158 5,021 4,701 Total gross fixed assets (at cost) Less: Accumulated depreciation Net fixed assets Total assets 5,021 7,292 4,701 6,430 353 330 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable Notes payable Other current liabilities Total current liabilities Long-term debt Total liabilities 1,189 1,072 1,542 2,042 3,585 1,402 806 2,209 1,043 1,934 Stockholders' Equity Preferred stock Common stockb,c,d Paid-in capital in excess of paron common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 2,665 2,287 3,708 7,292 4,221 6,430 "Other information" includes: Dividends paid in 2019 amount to $ 206 million The market price per share of common stock in 2019 was $32.60 and in 2018 was $35.45. Other useful industry average ratios: Current ratio 1.32:1 Quick (acid-test) ratio 0.76 times Inventory days 32.9 days Trade receivable days 7.5 days Trade payable days 17.1 days Total assets turnover 2.4 times Debt ratio 60.0% Debt/equity ratio 1.50 times Interest cover 4.3 times Gross profit margin 30.0% Operatinig profit margin 6.1% Net profit margin 2.1% Earnings per share (EPS) N/A Return on total assets (ROA)* 3.1% Return on Capital Employed 13.8% Price / Earnings (P/E) ratio 15.2 Note: Total assets turnover = Sales / Total assets Debt ratio = (Total liabilities / Total assets) x 100% Debt / equity ratio = Total liabilities / Common stock equity "Return on total assets (ROA) = Earnings available for common stockholders / Total assets Required: (a) Using the above information for EZEE Supermarkets Inc. showing your formula and showing your calculations, calculate and show for 2019 and 2018 relevant: i) Profitability ratio(s) ii) Liquidity ratio(s) iii) Efficiency ratio(s) (b) Using the results from 3.2)a), and the above information for: EZEE Supermarkets Inc., as well as the "Other information interpret your findings, giving a possible reason for any observed changes in each ratio. You may wish to include the industry averages for comparison. (c) Prepare a Statement of Cash Flows for the year ending 2019