Jamison examined monthly data for $2019($not given in the case$),$ and she detected an improving pattern during the year. Monthly sales were rising, costs were falling, and large losses in the early months had turned to a small profit by December. Thus, the annual data look somewhat worse than final monthly data. Also, it appears to be taking longer for the advertising program to get the message out, for the new sales offices to generate sales, and for the new manufacturing facilities to operate efficiently. In other words, the lags between spending money and deriving benefits were longer than D'Leon's managers had anticipated. For these reasons, Jamison and Campo see hope for the company$-$provided it can survive in the short run.

Jamison must prepare an analysis of where the company is now, what it must do to regain its financial health, and what actions should be taken. Your assignment is to help her answer the following questions. Provide clear explanations, not yes or no answers.

a$.$ Why are ratios useful? What are the five major categories of ratios?

b$.$ Calculate D'Leon's $2020$ current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company's liquidity positions in $2018,$ in $2019,$ and as projected for $2020?$ We often think of ratios as being useful $(1)$ to managers to help run the business, $(2)$ to bankers for credit analysis, and $(3)$ to stockholders for stock valuation. Would these different types of analysts have an equal interest in the company's liquidity ratios? Explain your answer.

c$.$ Calculate the $2020$ inventory turnover, days sales outstanding $($DSO$),$ fixed assets turnover, and total assets turnover. How does D'Leon's utilization of assets stack up against other firms in the industry?

d$.$ Calculate the $2020$ debt$-$to$-$capital and times$-$interest$-$earned ratios. How does D'Leon compare with the industry with respect to financial leverage? What can you conclude from these ratios?

e$.$ Calculate the $2020$ operating margin, profit margin, basic earning power $($BEP$),$ return on assets $($ROA$),$ return on equity $($ROE$),$ and return on invested capital $($ROIC$).$ What can you say about these ratios?

f$.$ Calculate the $2020$ price$/$earnings ratio and market$/$book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company?

g$.$ Use the DuPont equation to provide a summary and overview of D'Leon's financial condition as projected for $2020.$ What are the firm's major strengths and weaknesses?

h$.$ Use the following simplified $2020$ balance sheet to show, in general terms, how an improvement in the DSO would tend to affect the stock price. For example, if the company could improve its collection procedures and thereby lower its DSO from $45\mathrm{.}6$ days to the $32-$day industry average without affecting sales, how would that change "ripple through" the financial statements $($shown in thousands in the Bottom table in the pic$)$

and influence the stock price