Part A Given below are comparative statement of financial positions and an income statement for the Bay Company: Bay Company Statement of Financial Positions at 31 December 2018 2017 Assets Current assets Cash Accounts receivable Inventory Current assets Equipment (net) Total assets $ 27,000 215,000 148.000 390,000 310,000 $700,000 $ 23,000 185,000 152.000 360,000 280,000 S640.000 Liabilities and Equity Current liabilities Accounts payable Interest payable Current liabilities Long-term loans Total liabilities $115,000 15.000 130,000 200.000 330,000 $126,000 12.000 138,000 150.000 288,000 Share capital - Ordinary Retained earnings Shareholders' Equity 100,000 270.000 370,000 100,000 252,000 352,000 Liabilities and Equity $700.000 S640,000 Bay Company Income Statement for the year ended 31 December 2018 Net sales Cost of goods sold Gross profit on sales Operating expenses Profit from operations Interest expense Income taxes Net profit $800,000 (440,000 $360,000 (260,000 $ 100,000 (10,400) (23, 000) $ 66,600 All sales were made on account. Cash dividends declared by Bay Company during year 2018 totaled $48,600. Required: Compute the following ratios for the Bay Company. (Show your calculations and round the answer to 1 decimal place). a) Current Ratio; b) Accounts receivable turnover, c) Inventory turnover; d) Days' sales in inventory; e) Accounts payable tumover; f) Equity ratio; g) Gross margin ratio; h) Return on total assets; i) Return on ordinary shareholders' equity; and j) Times interest earned (20 marks) Part B Explain the measurement of the following ratios. 0 Current ratio; (ii) Times Interest Earned