II. Problem Solving. Show all the necessary computations. No solutions, no credit. Round off final answers to two decimal places. BA220 Corporation Income Statement Sales Cost of Goods Sold Gross Profit Margin Operating Expenses Depreciation Earnings Before interest & taxes Interest Earnings Before taxes Taxes (25%) Earnings after taxes 2019 15,000,000.00 9,750,000.00 5,250,000.00 3,000,000.00 500,000.00 1,750,000.00 500,000.00 1,250,000.00 312,500.00 937,500.00 2018 12,000,000.00 7,800,000.00 4,200,000.00 2,500,000.00 400,000.00 1,300,000.00 300,000.00 1,000,000.00 250,000.00 750,000.00 2019 2018 Balance Sheet Assets Cash Accounts Receivable Inventory Current Assets Fixed Assets Total Assets 100,000.00 1,500,000.00 1,100,000.00 2,700,000.00 900,000.00 3,600,000.00 80,000.00 1,200,000.00 970,000.00 2,250,000.00 750,000.00 3,000,000.00 Liabilities Accounts Payable Notes Payable Current liabilities Long-term liabilities Total liabilities Stockholder'equity Total liabilities & stockholder's equity 150,000.00 650,000.00 800,000.00 1,200,000.00 2,000,000.00 1,600,000.00 3,600,000.00 100,000.00 500,000.00 600,000.00 1,000,000.00 1,600,000.00 1,400,000.00 3,000,000.00 Common dividends Addition to retained earnings 375,000.00 562,500.00 300,000.00 450,000.00 Other Data Year-end Stock Price # of shares (Thousands) $120 3,000.00 $105 2,700.00 Ratios 1-12 = 4 points each = 48 points; Du Pont ROE=6 points Industry 2018 average 2019 Liquidity Ratios 1. Current Ratio 2.Quick Ratio N. 4 2 Asset Management Ratios 3. Inventory Turnover 4. Days Sales Outstanding 5. Total Assets Turnover 7 30 3 Debt Management Ratios 6. Debt Ratio 7. Liabilities-to-assets ratio 8. Times Interest Earned 50% 45% Profitability Ratios 9. Profit Margin 10. Return on Assets 22% 12% 11. Return on equity 20% 12. equity multiplier 2 13. Du Pont ROE Analysis Compare the following ratios from 2018-2019 and to industry average: A. Liquidity ratios (4 points) B. Efficiency ratios (4 points) C. Leverage (4 points) Which of the ratios in the Du Pont ROE contributed to profitability? (4 points)