Finroa, saree 90 PART S&S AIR, INC 2014 Income $40,259230 own and fly their own airplanes. The company has two mod which els; the Birdic, which sells for $53,000, and the Eagle, sells for $78,000. Sales 5,105,100 Although the tions are different from commercial aircraft companies. S&S Other expenses Air builds aircraft to order. By using prefabricated parts, the Depreciation company can complete the manufacture of an airplane in only five weeks. The company also receives a deposit on each order, as well as another partial payment before the order is complete. In contrast, a commercial airplane may take one and one-half to two years to manufacture once the order is 1.804 220 s 4,013,464 630,520 3,382.944 1,353,178 S 2,029,766 company manufactures aircraft, its operaCost of goods sold Taxable income : Taxes (40%) Net income 610,000 Mark and Todd have provided the following financial state- ments. Chris has gathered the industry ratios for the light air- plane manufacturing industry. 1.419,766 Add to retained earnings S&S AIR, ING 2014 Balance Sheet Liabilities and Equity Current liabilties Current assets $ 929,005 2,121,350 3,050,355 $ 456,435 Accounts payable 733,125 Notes payable Accounts receivable Inventory 1.073.180Total current liabilities 2,262,740 Total current assets s 5,500,000 Long-term debt Flxed assets $400,000 11.035.815 Net plant and equipment $17.723430 Shareholder equity Common stock Retained earnings Total equity $11,435,815 $19.986,170 Total assets 19,986.170 Total liabilities and equity Light Airplane Industry Ratios QUESTIONS Lower Quartile Median Quartile 1. Using the financial statements provided for SaS Air Upper calculate each of the ratios listed in the table for the ligh aircraft industry. Current ratio Quick ratio Cash ratio Total asset turnover Inventory turnover Receivables turnover 6.27 9.8 14.11 Total debt ratio Debt-equity ratio Equity multiplier Times interest earned5.18 8.06 Cash coverage ratio5.849.4110.27 Profit margin Return on assets Return on equity .50 1.43 .62 2. Mark and Todd agree that a ratio analysis can providea measure of the company's performance. They have cho- sen Boeing as an aspirant company. Would you choose Boeing as an aspirant company? Why or why no? Ther are other aircraft manufacturers S&S Air could use as a pirant companies. Discuss whether it is appropriate to us any of the following companies: Bombardier Cirrus Design Corporation, and Cessna Aircraft Compary 68 4.89 6.15 10.89 .52 .68 1.68 2.08 2563. Compare the performance of S&S Air to the industry 9.83 positive or negative relative to the industry, Suppose create an inventory ratio calculated as inventory by current liabilities. How do you think S&S Air's rativ would compare to the industry average? on why it might be viewed as 4.05% 6.05% 9.93% 5.10% 10.53% 18.14% 7.15% 13.21% 26.15% divided