Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2019, follow m a. Use the financial statements to complete the following table m 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 2. The current ratio is (Round to two decimal places The quick ratio is found 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 times interest earned ratio is I. (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 I. (Round to two decimal places.) b. Analyze Zach Industries financial condition as it is related to (1) liquidity, activity (5) debt. (profitability, and (5) market. Summarize the company's overall financial condition. (Select all the answers that apply) O A Liquidity Zach Industries liquidity position has deteriorated from 2018 to 2019 and is interior to the industry average. The tum may not be able to satisfy short-term obligations as they come de B. Activity: Zach Industries ability to convert assets into cash has deteriorated from 2018 to 2019 Examination into the cause of the 20.5 day increase in the average collection period is wanted Inventory turnover has also decreased for the period under review and is for compared to industry. The ton may be holding slightly excessive inventory OC. Debt Zach Industries de position has improved since 2018 and is below average Zach Industries' ability to service interest payments has deteriorated and is below the industry average D D Profitability. Although Zach Industries gross profit margin is below its industry average indicating high cost of goods sold, the firm has a superiornet profit margin in comparison to average. The form has lower than average operating expenses. The firm has a superior return on investment and retum nequity in comparison to the industry and shows and trend DE Market Zach Industries increase in the market price relative to their book value per the indicates that the firm's performance has been interpreted as more positive in 2019 than in 2018 and it is a little higher than the industry Click to select your answer(s). oments of * Data Table - X lowing ta is relate condition ne decir mal place is relate condition. (Seld was det (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Ratio Industry average Actual 2018 Actual 2019 Current ratio 1.81 1.85 Quick ratio 0.71 0.79 Inventory turnover 2.53 2.62 Average collection period 37.8 days 36.8 days Debt ratio 64.6% 66.6% Times interest earned ratio 3.6 3.8 Gross profit margin 37% 39% Net profit margin 2.9% 3.0% Return on total assets 3.3% 3.3% Return on common equitiy 7.8% 6.3% Market/book ratio 0.8 0.9 *Based on a 365-day year and end-of-year figures. In obligations as collection peria ssets ir ad is fai ved si profit superio ow the industry in comparison ket pri tive in 2019 tha the icon located on the top-right corner of the data table below in order to copy its into a spreadsheet.) $160,000 106,500 $53,500 m 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 Not wofite haftane $15,800 10.200 960 10,300 $37,260 $16,240 6,300 con nin Jitiv Print Done Data Table Net profits Derore taxes Less: Taxes Net profits after taxes hlcc $9,940 4,330 $5,610 al cor fm ob! 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 le coll $450 1,000 25.100 45.200 $71,750 $26.500 89.900 38.100 $78,300 $150.050 plow th nin Litive in Print Done inventories 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 2019 at a price of $24 per share