PART II: According to the balance sheet and income statement of Company A (see Table 1 and Table 2), answer the following questions and interpret (comment) all your results. (Total= 60 pts) * Show your calculations in each step. **Note that, answers without necessary calculations, comments and detailed explanations will not be graded. 1. Perform a horizontal analysis for "net sales revenue vs. net trade receivables" and comment. 2. Conduct vertical analysis for "cash and cash equivalents" and "costs of goods sold" accounts for 2019 and comment. (Sector averages are 0.17 and 0.63, respectively) 3. Calculate liquidity ratios for 2019 and comment. 4. Calculate "receivables turnover ratio" and "average collection period" for 2019 and comment. 5. Calculate EBITDA margin for 2018 and comment (Depreciation and amortization in costs of sales and operating expenses are 12,000 $, and the sector average is 0.52) 6. Derive and construct Du Pont equation for 2018 and 2019 by using values in the financial statements, compare and contrast the results and briefly explain what does Du Pont equation says? BONUS QUESTION: What is the role of CFO? Explain briefly (5 points) TABLE 1. INCOME STATEMENT 2018 61,200 -1,200 60,000 INCOME STATEMENT Sales revenue Sale returns Net sales revenue Cost of goods sold Gross Margin Marketing, selling, and delivery expenses General administrative expenses Operating income Other gains and losses Financing expenses Period income Corporate tax Net period income 2019 80,000 -2,000 78,000 -60,000 18,000 -5,600 -5,000 7,400 -1,500 3,000 2,900 -580 2,320 40,000 20,000 4,850 -4,150 11,000 -1,000 -2,000 8,000 -1,600 6,400 TABLE 2. BALANCE SHEET 2019 2018 10,000 8,000 21,000 14,000 23,000 16,000 3,000 2,000 57,000 40,000 92,280 73,800 92,280 73,800 149,280 113,800 ASSETS Current Assets Cash and cash equivalents Trade receivables (net) Inventories Prepaid expenses and accrued revenues Total current assets Non-current (fixed) Assets Tangible assets (net) Total non-current (fixed) assets TOTAL ASSETS LIABILITIES Short-term Liabilities Bank loans (ST) Trade payables Taxes and other duties payable Provision for corporate tax Total short-term liabilities Long-term Liabilities Bank loans (LT) Total long-term liabilities Total liabilities Shareholder's Equity TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 7,000 16,000 1,700 580 25,280 9,000 12,000 2,200 1,600 24,800 45,000 35,000 45,000 35,000 70,280 59,800 79,000 54,000 149,280 113,800 PART II: According to the balance sheet and income statement of Company A (see Table 1 and Table 2), answer the following questions and interpret (comment) all your results. (Total= 60 pts) * Show your calculations in each step. **Note that, answers without necessary calculations, comments and detailed explanations will not be graded. 1. Perform a horizontal analysis for "net sales revenue vs. net trade receivables" and comment. 2. Conduct vertical analysis for "cash and cash equivalents" and "costs of goods sold" accounts for 2019 and comment. (Sector averages are 0.17 and 0.63, respectively) 3. Calculate liquidity ratios for 2019 and comment. 4. Calculate "receivables turnover ratio" and "average collection period" for 2019 and comment. 5. Calculate EBITDA margin for 2018 and comment (Depreciation and amortization in costs of sales and operating expenses are 12,000 $, and the sector average is 0.52) 6. Derive and construct Du Pont equation for 2018 and 2019 by using values in the financial statements, compare and contrast the results and briefly explain what does Du Pont equation says? BONUS QUESTION: What is the role of CFO? Explain briefly (5 points) TABLE 1. INCOME STATEMENT 2018 61,200 -1,200 60,000 INCOME STATEMENT Sales revenue Sale returns Net sales revenue Cost of goods sold Gross Margin Marketing, selling, and delivery expenses General administrative expenses Operating income Other gains and losses Financing expenses Period income Corporate tax Net period income 2019 80,000 -2,000 78,000 -60,000 18,000 -5,600 -5,000 7,400 -1,500 3,000 2,900 -580 2,320 40,000 20,000 4,850 -4,150 11,000 -1,000 -2,000 8,000 -1,600 6,400 TABLE 2. BALANCE SHEET 2019 2018 10,000 8,000 21,000 14,000 23,000 16,000 3,000 2,000 57,000 40,000 92,280 73,800 92,280 73,800 149,280 113,800 ASSETS Current Assets Cash and cash equivalents Trade receivables (net) Inventories Prepaid expenses and accrued revenues Total current assets Non-current (fixed) Assets Tangible assets (net) Total non-current (fixed) assets TOTAL ASSETS LIABILITIES Short-term Liabilities Bank loans (ST) Trade payables Taxes and other duties payable Provision for corporate tax Total short-term liabilities Long-term Liabilities Bank loans (LT) Total long-term liabilities Total liabilities Shareholder's Equity TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 7,000 16,000 1,700 580 25,280 9,000 12,000 2,200 1,600 24,800 45,000 35,000 45,000 35,000 70,280 59,800 79,000 54,000 149,280 113,800