Please Solve the ratios and reason for further analysis

D-3 - ANSWER FORM: Calculate selected ratios for 2022 2020 2021 2022 Profitability Ratios: Profit Margin 2.08% 1.65% Return on equity 25.75% 22.78% Asset Utilization Ratios: Receivable turnover 6.5x 6.0x Avg. Accounts Receivable 56 61 Collection period Inventory turnover 14.6x 16.7x Accounts Payable Period 47 days 55 days Liquidity Ratios: Current ratio 2.0 1.5 Quick ratio 1.6 1.2 A. Parsons Fall 2020 22The Bermuda College Assessment #1 Finance I: Balance Sheet Assets 2020 2021 2022 Cash $ 1,775 $ 1,178 $ 215 Accounts receivable 21,920 32,534 43,770 Inventory 5,699 7,808 10,204 Prepaid expenses 309 191 770 Capital Assets 6,200 8,124 10,492 Total assets $35.903 $49.835 $65.451 Liabilities and Shareholders' Equity Accounts payable $10,658 $19,766 $31,351 Customer deposits 4,238 7,961 9,420 Term loan 9,500 8,000 7,500 Common stock 6,120 6,120 6,120 Retained earnings 5,387 7,988 11,060 Total liabilities & Shareholders' equity $35.903 $49.835 $65.451 Answer sheet provided on the next 2 pagesThe Bermuda College Assessment #1 Fall 2020 Finance I: MGN 2240 Debt Utilization Ratios: Debt to total assets 67.95% 71.69% Times interest earned 4.3x 5.1x Required: Based on the above ratio calculations, which ratio (or ratio trend) indicates further analysis is required before Q. Lovell invests in Truro Lease Improvements Lid. Ratio: Reason for further analysis A. Parsons Fall 2020 23Question 0-3: Financial Analysis Q. Lovell is considering an investment in Truro Leasehold Limited., a growing company that has been in business for ve years. The good growth is the result of a reputation built on high-quality workmanship, the use of rstvclass materials, and fair prices. However, Truro has experienced cash flow difculties, and some of Truro's suppliers have expressed concern with the slow payment on their accounts. This can be attributed in part to the increasing number of government jobs awarded Truro. Although the government jobs are steady work, payment is slower than from private work. W Examine the financial statements of Truro Leasehold for the past three years and prepare the basic ratios for 2022 (2020 and 202! are already calculated} as listed below. TRURO LEASEHOLD LIMITED. Income Statement 2020 202] 2022 Sales $ [42,431 13 I 95,200 $245,109 Cost ofgoods sold 83,351 l30,l93 163,145 Gross prot 59, [30 65,002 76,964 Other expenses 54,416 60,133 71,672 Operating prot 4,7[4 4,369 5,292 Interest expense I, [00 950 800 Earnings before taxes 3,6!4 3.919 4,492 Taxes M .203 J02 Earnings after Taxes m 1,111 3463} Dividends declared 6l2 612 6 l2