please help answer paragraph II circled on the forth picture. Use first and second picture the mini case and question #2 for Refernce.

Third picture is the answer for question #1 just for reference incase u need it.

finance department of a Fortune 500 company since then. MINICASE Ratio Analysis at S&S Air, Inc. Chris Guthrie was recently hired by S&S Air, Inc., to assist the company with its financial planning and to evaluate the company's performance. Chris graduated from college five years ago with a finance degree. He has been employed in the S&S Air was founded 10 years ago by friends Mark Sexton and Todd Story. The company has manufactured and sold light airplanes over this period, and the company's products have received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who dir own airplanes The coram has made F cho comment on why it might you create neted as inventor deurent liabilities. How whisk SS Airs ratio would compare to the industry arape Financiaments and Long Term Finance PART 2 90 SAS AIR, INC. 2018 Income Statement $46.28 3453 725 the Birdie, which selbs for 10.000, and the Eagle, which sells for $17.000 are different from commercial aircraft companies. S&S Air Although the company manufactures aircraft, its operations builds aircraft onder. By using prefabricated parts, the com- pany can complete the manufacture of an airplane in only five weeks. The company also receives a deposit on cach order, as well as another partial payment before the order is complete. In contrast a commercial airplane may take one and one-half to two years to manufacture once the order is placed. Mark and Todd have provided the following financial state- ments. Chris has gathered the industry ratios for the light air- Sales Cost of goods sold Other expenses Depreciation EDIT Interest Taxable income Tawe 254 Net Income Dividends Add to retained earnings $ 3.00 772 $ 231776 $ 705.000 1.612.789 plane manufacturing industry. SES AIR INC. 2018 Balance sheet Assets Current assets Cash Accounts receivable Inventory Total current assets $ 524.963 843.094 1.235,161 $ 2,603.218 Liabilities and Equity Current liabilities Accounts payable Notes payable Total current liabilities $ 1.068.356 2.439553 $ 3.507303 Long-term debt $ 6.300.000 Fixed assets Net plant and equipment $20.381,945 Shareholder equity Common stock Retained earnings Total equity Total liabilities and equity $ 460.000 12,717.254 $13,177 254 $22.985,163 Total assets $22.985,163 Light Airplane Industry Ratios Lower Quartile Median Current ratio .50 1.43 dick ratio- 21 .35 sash ratio .08 21 Total asset turnover - .68 .85 Luentory turnover 4.89 6.15 Receivables turnover - 6.27 Total debt ratio .41 .52 Lot-equity ratio .68 1.08 Fauy multiplier 1.68 2.08 imes interest earned - 5.18 8.06 posh coverage ratio 5.84 9.41 Poortmargin- 4.05% 5.10% Pturn on assets 6.05% 9.53% 9.93% Upper Quartile 1.89 .62 39 1.38 10.89 14.11 61 1.56 QUESTIONS 1. Using the financial statements provided for S&S AL calculate each of the ratios listed in the table for the light aircraft industry 2. Mark and Todd agree that a ratio analysis can pro vide a measure of the company's performance. The have chosen Boeing as an aspirant company. Would you choose Boeing as an aspirant company? Why or why not? There are other aircraft manufacturers S&S Air could use as aspirant companies. Discus whether it is appropriate to use any of the followit companies: Bombardier, Embraer, Cirrus Air- craft Corporation, and Cessna Aircraft Company 3. Compare the performance of S&S Air to the industry positive use to cindustry. Suppose 9.82 2.56 9.83 10.27 7.15% 13.21% 19.15% Brumon equity - 15.14% good Calculation of ratios given Ratio Formula Calculation Industry Comment Bais Current ratio Current assets/ Current Higher Liabilities Bad (2603218/3507909) -0.74 1.43 the better Quick ratio (Current assets-Inventory) (2603218- Higher 35 Average Current Liabilities 1235161/3507909)-0.39 the better Cash Ratio Cash and cash equivalents/ bad (524963/3507909) 0.15 .21 Current Liabilities equal to 1 is better Total asset turnover Net sales/total assets (46298195/22985163) = Near to 2 .85 2.01 is better Inventory turnover sales / inventory (46298195/1235161) 6.15 Good Higher 37.48 the better Receivables sales/accounts receivable (46298195/843094) Higher 9.82 Good turnover =54.91 the better Lower Total debt ratio total debt total assets (6300000/22985163) = .52 Good 0.274 the better (6300000/13177254) Debt equity Ratio total debt/ total equity 1.08 Lower Good -0.48 the better (22985163/13177254) range equity multiplies total assets/total equity 2.08 good between -1.74 1 and 1.5 Times interest EBIT/ INterest expense (3815434/725048) 5.26 8.06 good Higher earned the better Interest cannot be Cash coverage ratio Total cash/ interest expense (524963/725048)=0.72 9.41 Bad paid for short term IS equal Profit margin Income after tax/ sales (2317789/46298195) - 5.10% Average 5% indistry ratio Better Return on assets Income after tax/total assets (2317789/22985163) 9.53% Good than =10.08% industry Better Return on equity Income after tax/ total (2317789/13177254) than equity 15.14% Good =17.59% industry to PAragraph l: Every ratio is useful but its useness depends on the nature of the user. Whenever an investor or a layman looks on these ratios , then it looks first on its profit margin to know the outcome of benefits from business. Also, he looks on return on equity as well to get the better information on invested funds. If a bank or money lender will look, then its total debt ratio, and capacaity fo pay interest will be seen. It will look at its current ratio, cash ratio and quick ratio. So, being an investor i will look on retuen on equity and profit margin of the company. SPECIFIC INPUT: Table: Answer Question #1 on Page 90 in the book. That is, calculate the financial ratios listed in the table for S&S Air Indicate - clearly - which ratios are good/positive, averageeutral and badegative. Paragraph 1: In a separate paragraph, comment on what you feel are the key ratios and why these are important this should be very (!) brief Paragraph II: The Case Study mentions other aircraft manufacturers. Indicate which are good comps for S&S and which ones are not good comparable companies. Also, briefly indicate why or why not these are good or bad comps