Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow a. Use the financial statements to complete the following table Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries financial condition as it is related to (1) liquidity, (2) activity. (3) debt. (4) profitability, and (5) market. Summarize the company's overall financial condition a. The current ratio is (Round to two decimal places.) The quick ratio is . (Round to two decimal places.) The inventory turnover is . (Round to two decimal places.) The average collection period is days. (Round to one decimal place.) The debt ratio is [%. (Round to one decimal place.) The times interest earned ratio is (Round to one decimal place.) The gross profit margin is %. (Round to one decimal place.) The net profit margin is %. (Round to one decimal place.) The return on assets is %. (Round to one decimal place) The return on common equity is %. (Round to one decimal place.) The market/book value is . (Round to two decimal places.) b. Analyze Zach Industries financial condition as it is related to (I) liquidity, (2) activity (3) de profitability, and (5) market Summarize the company's overal in condition (Select all the answers that apply) DA Liquidity: Zach Industries liquidity position has detected from 2018 to 2019 and is inferior to the industry average. The firm may not be ble to say short term obligations as they come due B. Activity: Zach Industries' ability to convert assets into cash has deterosted on 2018 to 2010. Examination into the cause of the 20 ay increase in the werage collection period is wawriedisvestory turnover has also decreased for the period under review and is fair compared to industry. The firm may be holding slightly excessive inventory C. Debt: Zach Industnes or position has improved since 2018 and is below average Zachine by to service interest payment has denied and is below the industry D. Profitability: Although Zach Industries' gross profit margin is below its industry average indicating high cost of goods sold them as a superiornet profit margin in comparison to average. The firm has lower than average operating expenses. The firm has a superior return on investment and return on equity in comparison to the industry and shows an upward trend E Market Zach Industries'increase in their market price relative to their book value per share indicates that the firm's performance has been interpreted as more positive in 2010 than in 2018 and it is a little higher than the industry te the following tab dition as it is related condition Round to one decim two decimal places $160,000 106,500 $53,500 adition as it is related al condition. (S Zach Industries Income Statement for the Year Ended December, 31, 2019 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes ity position has dete to convert assets in der review and is fair cion has improved sid ustries' gross profit n e firm has a superior ce in their market pric m obligations a e collection pen $15,800 10.200 960 10,300 $37,260 $16.240 6.300 $9.940 4,330 How the industry h in comparison itive in 2019 than Callur 4 of 11 (1 complete) Data Table statements of -X me following tab as it is related Net profits after taxes $5,610 al condition d to one decim G decimal places as it is related al condition. (Select sition has dete hvert assets int view and is fair Zach Industries Balance Sheet December 31, 2019 Assets Cash Marketable securities Accounts receivable Inventories Total current assets Land Buildings and equipment Less: Accumulated depreciation Net fixed assets Total assets Liabilities and Stockholders' Equity Accounts payable $450 1,000 25,100 45,200 $71,750 $26,500 89.900 38,100 $78,300 $150,050 m obligations as the Je collection period is plow the industry aver as improved sit E' gross profit n has a superior meir market pric n in comparison to av Jitive in 2019 than in 2 $22.000 Print Dong Data Table al statements of - the following tab on as it is related al conditi und to one decim wo decimal places on as it is related hal conditi Tnventores 45,200 Total current assets $71,750 Land $26,500 Buildings and equipment 89,900 Less: Accumulated depreciation 38,100 Net fixed assets $78,300 Total assets $150,050 Liabilities and Stockholders' Equity Accounts payable $22,000 Notes payable 46,500 Total current liabilities $68,500 Long-term debt $22.920 Common stock $31,900 Retained earnings $26,730 Total liabilities and stockholders' equity $150,050 *The firm's 2.500 outstanding shares of common stock closed 2019at a price of $24 per share. position has dete onvert assets int review and is fair has improved sir es' gross profit ne m has a superior their market pric m obliga Je collect How the i n in com Jitive in 2 statements of Data Table the following ta en as it is relate d to one decir (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) decimal place Actual 2019 as it is relate Actual 2018 185 0.79 2.62 sition has det 36.8 days avert assets in View and is far Ratio Industry average Current ratio 181 Quick ratio 0.71 Inventory turnover* 2.53 Average collection period 37.8 days Debt ratio 64.6% Times interest earned ratio 3.6 Gross profit margin 37% Net profit margin 2.9% Return on total assets 3.3% Return on common equitiy 7.8% Market/book ratio 0.8 *Based on a 365-day year and end-of-year figures 66.6% 3.8 39% 3.0% 3.3% 6.3% 0.9 s improved si gross profit has a superid eir market prie ow an tive Print Done Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow a. Use the financial statements to complete the following table Assume the industry averages given in the table are applicable for both 2018 and 2019. b. Analyze Zach Industries financial condition as it is related to (1) liquidity, (2) activity. (3) debt. (4) profitability, and (5) market. Summarize the company's overall financial condition a. The current ratio is (Round to two decimal places.) The quick ratio is . (Round to two decimal places.) The inventory turnover is . (Round to two decimal places.) The average collection period is days. (Round to one decimal place.) The debt ratio is [%. (Round to one decimal place.) The times interest earned ratio is (Round to one decimal place.) The gross profit margin is %. (Round to one decimal place.) The net profit margin is %. (Round to one decimal place.) The return on assets is %. (Round to one decimal place) The return on common equity is %. (Round to one decimal place.) The market/book value is . (Round to two decimal places.) b. Analyze Zach Industries financial condition as it is related to (I) liquidity, (2) activity (3) de profitability, and (5) market Summarize the company's overal in condition (Select all the answers that apply) DA Liquidity: Zach Industries liquidity position has detected from 2018 to 2019 and is inferior to the industry average. The firm may not be ble to say short term obligations as they come due B. Activity: Zach Industries' ability to convert assets into cash has deterosted on 2018 to 2010. Examination into the cause of the 20 ay increase in the werage collection period is wawriedisvestory turnover has also decreased for the period under review and is fair compared to industry. The firm may be holding slightly excessive inventory C. Debt: Zach Industnes or position has improved since 2018 and is below average Zachine by to service interest payment has denied and is below the industry D. Profitability: Although Zach Industries' gross profit margin is below its industry average indicating high cost of goods sold them as a superiornet profit margin in comparison to average. The firm has lower than average operating expenses. The firm has a superior return on investment and return on equity in comparison to the industry and shows an upward trend E Market Zach Industries'increase in their market price relative to their book value per share indicates that the firm's performance has been interpreted as more positive in 2010 than in 2018 and it is a little higher than the industry te the following tab dition as it is related condition Round to one decim two decimal places $160,000 106,500 $53,500 adition as it is related al condition. (S Zach Industries Income Statement for the Year Ended December, 31, 2019 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes ity position has dete to convert assets in der review and is fair cion has improved sid ustries' gross profit n e firm has a superior ce in their market pric m obligations a e collection pen $15,800 10.200 960 10,300 $37,260 $16.240 6.300 $9.940 4,330 How the industry h in comparison itive in 2019 than Callur 4 of 11 (1 complete) Data Table statements of -X me following tab as it is related Net profits after taxes $5,610 al condition d to one decim G decimal places as it is related al condition. (Select sition has dete hvert assets int view and is fair Zach Industries Balance Sheet December 31, 2019 Assets Cash Marketable securities Accounts receivable Inventories Total current assets Land Buildings and equipment Less: Accumulated depreciation Net fixed assets Total assets Liabilities and Stockholders' Equity Accounts payable $450 1,000 25,100 45,200 $71,750 $26,500 89.900 38,100 $78,300 $150,050 m obligations as the Je collection period is plow the industry aver as improved sit E' gross profit n has a superior meir market pric n in comparison to av Jitive in 2019 than in 2 $22.000 Print Dong Data Table al statements of - the following tab on as it is related al conditi und to one decim wo decimal places on as it is related hal conditi Tnventores 45,200 Total current assets $71,750 Land $26,500 Buildings and equipment 89,900 Less: Accumulated depreciation 38,100 Net fixed assets $78,300 Total assets $150,050 Liabilities and Stockholders' Equity Accounts payable $22,000 Notes payable 46,500 Total current liabilities $68,500 Long-term debt $22.920 Common stock $31,900 Retained earnings $26,730 Total liabilities and stockholders' equity $150,050 *The firm's 2.500 outstanding shares of common stock closed 2019at a price of $24 per share. position has dete onvert assets int review and is fair has improved sir es' gross profit ne m has a superior their market pric m obliga Je collect How the i n in com Jitive in 2 statements of Data Table the following ta en as it is relate d to one decir (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) decimal place Actual 2019 as it is relate Actual 2018 185 0.79 2.62 sition has det 36.8 days avert assets in View and is far Ratio Industry average Current ratio 181 Quick ratio 0.71 Inventory turnover* 2.53 Average collection period 37.8 days Debt ratio 64.6% Times interest earned ratio 3.6 Gross profit margin 37% Net profit margin 2.9% Return on total assets 3.3% Return on common equitiy 7.8% Market/book ratio 0.8 *Based on a 365-day year and end-of-year figures 66.6% 3.8 39% 3.0% 3.3% 6.3% 0.9 s improved si gross profit has a superid eir market prie ow an tive Print Done