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Note: kindly provide a detailed analysis & Interceptions for the mentioned rations. Question # 5 The Qayum Heaters Company, a manufacturer and wholesaler of high-quality
Note: kindly provide a detailed analysis & Interceptions for the mentioned rations.
Question # 5 The Qayum Heaters Company, a manufacturer and wholesaler of high-quality heaters, has been experiencing low profitability in recent years. As a result, the board of directors has replaced the president of the firm with a new president, Abdul Qayum, who has asked you to make an analysis of the firm's financial position using the financial ratios. The most recent industry average ratios, and Qayum Heaters Co financial statements, are as follows: BALANCE SHEET INCOME STATEMENT Cash $ 600 Net Sales (all credit $ 14630 Accounts receivable 1100 Cost of goods sold (9930) =Gross Profit $ 4,700 Inventories 2.500 Selling, general and Current assets $ 4200 Administration expense (2,430) Net fixed assets 4330 Interest expense (580) Total Assets $ 8530 =Profit before taxes $ 1690 Accounts payable $ 520 Taxes (730) Accruals 360 =Net Profit $ 960 Short term loans 1200 Current Liabilities $ 2080 Long-term debt 2000 Shareholder's equity 4450 Total Liabilities and Shareholder's Equity $_8530 Requirements On the basis of this information, compute and interpret the results with industry average of (i) Debt to total equity, (ii) Inventory Turnover ratio (iii) Total Asset Turnover(iv) Net Profit Margin (v) Return on Investment INDUSTRY AVERAGE RATIOS Debt to Equity 0.70 Total Assets Turnover 2x Total Capitalization 0.44 Net Profit Margin 15% Inventory Turnover 4x Return on Investment 25% Calculation is based on a 365-day yearStep by Step Solution
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