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I need a help on the * areas. Comprehensive Ratio Analysis The Jimenez Corporation's forecasted 2020 financial statements follow, along with some industry average ratios.

I need a help on the * areas.

Comprehensive Ratio Analysis

The Jimenez Corporation's forecasted 2020 financial statements follow, along with some industry average ratios.

Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2020

Assets

Cash

$ 68,000

Accounts receivable

439,000

Inventories

898,000

Total current assets

$1,405,000

Fixed assets

431,000

Total assets

$1,836,000

Liabilities and Equity

Accounts payable

$ 332,000

Notes payable

120,000

Accruals

150,000

Total current liabilities

$ 602,000

Long-term debt

404,450

Common stock

574,840

Retained earnings

254,710

Total liabilities and equity

$1,836,000

Jimenez Corporation: Forecasted Income Statement for 2020

Sales

$4,290,000

Cost of goods sold

3,728,000

Selling, general, and administrative expenses

397,456

Earnings before interest and taxes (EBIT)

$ 164,544

Interest expense

30,000

Earnings before taxes (EBT)

$ 134,544

Taxes (25%)

33,636

Net income

$ 100,908

Jimenez Corporation: Per Share Data for 2020

EPS

$ 4.39

Cash dividends per share

$ 0.95

P/E ratio

5.0

Market price (average)

$21.94

Number of shares outstanding

23,000

Industry Ratiosa

Quick ratio

1.0

Current ratio

2.7

Inventory turnoverb

7.0

Days sales outstandingc

32.0

days

Fixed assets turnoverb

13.0

Total assets turnoverb

2.6

Return on assets

9.1

%

Return on equity

18.2

%

Profit margin on sales

3.5

%

Debt-to-assets ratio

21.0

%

Liabilities-to-assets ratio

50.0

%

P/E ratio

6.0

Market/Book ratio

3.5

Notes:

aIndustry average ratios have been stable for the past 4 years.

bBased on year-end balance sheet figures.

cCalculation is based on a 365-day year.

Calculate Jimenez's 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses. Assume that there are no changes from the prior period to any of the operating balance sheet accounts. Do not round intermediate calculation. Round your answers to two decimal places.

Ratios

Firm

Industry

Comment

Quick ratio

1.0

-Select-StrongWeak

Current ratio

2.7

-Select-StrongWeak

Inventory turnover

7.0

-Select-PoorHigh

Days sales outstanding

days

32 days

-Select-PoorHigh

Fixed assets turnover

13.0

-Select-PoorHigh

Total assets turnover

2.6

-Select-PoorHigh

Return on assets

%

9.1%

-Select-BadGood

Return on equity

%

18.2%

-Select-BadGood

Profit margin on sales

%

3.5%

-Select-BadGood

Debt-to-assets ratio

%

21.0%

-Select-LowHigh

Liabilities-to-assets ratio

%

50.0%

-Select-LowHigh

P/E ratio

6.0

-Select-PoorHigh

Market/Book ratio

3.5

-Select-PoorHigh

So, the firm appears to be badly managed

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This is what I used as a reference

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