HBZZ, CORPORATION, DEC 31, 2018 Balance Sheet Cash Account Receivable Inventory Finished Goods Total Current Assets Land Plant & Equipment Original Cost less Accumulated Depreciation Total Long-Term Assets $ 2,900,000 $ 1,100,000 $ 2,000,000 $ 6,000,000 $ 300,000 $9,500,000 $1,000,000 $ 8,500,000 $ 8,800,000 Total Assets Account Payable Loan pmt due w/l one year Supplies Bill to be paid within 1 year Total Current Liabilities Long Term Loan Total Long-Term Liabilities Total Liabilities Common Shares Retained Earnings Total Equity Total Liabilities & Equity HBZZ, CORPORATION Data During the Year 2018 Net Income Interest expense Total Revenue $ 14,800,000 $ 2,400,000 $ 2,000,000 $ 900,000 $ 5,300,000 $ 3,000,000 $ 3,000,000 $ 8,300,000 $ 2,000,000 $ 2,500,000 $ 4,500,000 $ 12,800,000 $ 750,000 $ 150,000 $ 1,500,000 i. Using the balance sheet and net income values provided, please compute and explain the meaning of the business ratios for this business. 32 points Current Ratio: Interest Coverage Ratios Return on Asset: Profit Margin Return on Equity Debt to Equity Quick ratio Equity Multiplier ii. Comment on the financial risk of this firm. Be sure to define financial risk as part of your answer. 4 points iii. If this firm faces business risk, would they be in trouble financially? Be sure to define the term business risk and sources for business risk as part of your answer. 4 points iv. HBZZ, CORPORATION purchased equipment using a loan for the entire purchase price of $160,000 on Jan 1, 2019.The estimated life of the equipment is 6 years. The residual value (salvage value) is estimated at 40,000. Complete the table below - show your work. 8 points Straight Line Declining Balance / Depreciation expense in 2019 Book Value end of year 2 v. How is it possible for a firm such as HBZZ Corporation to show a sizable net income and still be running out of cash? Explain some of the MAJOR reasons. 4 points vi. HBZZ has decided to obtain funds to purchase a new factory. They can use either debt or equity. Outline the key factors they need to consider when determining the best source of financing. 4 points