Gadens was recently hired as a financial analyst by Taylor, Inc. which is a Pennsylvania based company. His first task is to conduct a financial statement analysis of firm covering the past 2 years BALANCE SHEETS Cash Accounts receivable Inventory Total current assets 2019 $52,000 402,000 836,000 $1,290,000 2018 57,600 351,200 715,200 $1,124,000 Gross fixed assets Less: Accumulated depreciation Net fixed assets $ 527,000 166,200 S 360,800 S491,000 146,200 S344,800 Total assets $1,650,800 $1,468,800 Accounts payable Notes payable Accruals Total current liabilities $175,200 225.000 140,000 S 540,200 $145,600 200,000 136,000 S481,600 Long-term debt Common stock Retained earnings Total equity Total Claims 424,612 460,000 225,988 $685,988 $1,650,800 323.432 460,000 203,768 $663,768 $1,468,800 INCOME STATEMENTS Sales Cost of goods sold Other expenses Depreciation EBIT Interest expense EBT Taxes (40%) Net income $3,850,000 3.250,000 430,300 20,000 $ 149,700 76,000 $73,700 29.480 $44,220 $3,432,000 2,864,000 340,000 18,900 $209,100 62.500 146,600 58.610 587,960 a i OTHER DATA December 31 stock price Number of shares outstanding Dividend per share Annual lease payment Earnings per share $6.00 100,000 SO 22 $40,000 S0.442 $8.50 100,000 $0.22 $40,000 $0.880 Gardems also developed the following industry average data for 2018: Ratio Industry Average Current 2.7 Quick 1.0 Inventory Turnover 7.0 Days sales outstanding (DSO) 32.0 days Fixed asset turnover 10.7 Total asset turnover 2.6 Debt ratio 50.0% Times Interest Expense 2.5 Profit margin 3.5% Basic earning power 19.196 9.196 ROA ROE 18.2% 14.2 P/E Focus Entertainment HP Pavillon and productivity. El Amazing wisuals 23 diagonal widescreen HD Beauty talkan Full HOW Free 256 fetime cloud storage from da How should Gardems interpret this financial information? Sardems is thinking along the following lines on this case: a. Assess the firm's liquidity position current ratio and quick ratio b. How do the firm's asset management ratios stack up against the industry averages? Compute Inventory Turnover Ratio, Total Asset Turnover Ratio c. Calculate firm's profitability ratios. Compute net profit margin, return on assets, return on equity d. Apply the Du Pont analysis to 2019 to obtain a general overview of the firm's financial condition