pleassse answer question number two on the book circled in red. please.

the first picture is the mini case must read it and compare it with the other companies on question number 2 on the second picture circled in red.

the third picture is the answer to question number 1 use for reference.

the company with its financial planning and to evaluate the years ago with a finance degree. He has been employed in the 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 company's performance. Chris graduated from college five 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 Praca Logancial Planning PART 2 90 SAS AR INC 2018 Income Start 34 for $17 Sa Cost of goods sold Omer expenses Depreciation 5 3915. 725 and by their own places. The company has two models the Bands, which relle 103.000, and the Eagle, which All the company manufactures are all is operis we different from commercial craft companies SASA builderrat to order By in prehricated parts, the com pany can complete the manufacture of an airplane in only five week The company also moeives a deposit on cach order, as well as another partial payment before the order is complete contrasta commercial airplane may take one and one ballo two years to manufacture once the order is placed Mark and Todd have provided the following financial ments. Chris has gathered the industry ratios for the light 53093 Table income 1722 2.3177 Dividends Add to retained earings SASA INC 2013 Balance Sheet diviwy current liabirww do you think SES Alf's ratio would compare to ti ndustry average $ 705.000 1,612,789 plane manufacturing industry Liabilities and Equity Current liabilities Current assets Accounts payable Cash Notes payable Accounts receivable Total current liabilities Inventory Long-term debt $ 6.300.000 Fixed assets Net plant and equipment $20.381.945 Shareholder equity Common stock $ 460,000 Retained earnings 12.717.254 Total equity $13.177.254 Total assets $22.985.163 Total liabilities and equity $22.985.162 QUESTIONS Light Airplane Industry Rates provide Lower Upper calculate each of the ratios listed in the table for Quartie Medias Current light aircraft industry 50 1.89 Alisk ratio- 21 35 2. Mark and Todd agree that a ratio analysis can pro Ofish ratio 08 vide a measure of the company's performance. The 21 39 tal asset tumover - have chosen Boeing as an aspirant company. Woda .68 85 130 entory tumover - 4.89 6.15 10.89 you choose Boeing as an aspirant company? Why Heivables turnover - 6.27 or why not? There are other aircraft manufacturers 9.82 14.11 odebrat S&S Air could use as aspirant companies. Discus 52 61 webt-equity ratio- whether it is appropriate to use any of the following .68 1.08 Vagy multiplier 1.56 companies: Bombardier, Embraer, Cirrus Air 1.68 208 mes interest eamed - 256 5.18 craft Corporation, and Cessna Aircraft Company 8.06 9.80 esh soverage ratio 5.84 Cor vare the performance of S&S Air to the industry Demargin- 10.27 4.05% For comment on who porn on assets - 5.103 6.05% 9.53% eive to use industry. Supporte 13.21% 9.93% you ca 15.145 mory stio calculated as inventory $10.94 2.4313 $ 3.50799 843.094 1.235.161 $ 2.503.218 7.15% Bonequity positive 19.15% good Calculation of ratios given Ratio Formula Calculation Industry Comment Bais Current ratio Current assets/ Current Bad (2603218/3507909) -0.74 1.43 Liabilities Higher the better (Current assets-Inventory) (2603218- Quick ratio Higher .35 Current Liabilities 1235161/3507909)=0.39 Average the better Cash and cash equivalents/ Cash Ratio bad (524963/3507909) 0.15 21 equal to 1 Current Liabilities is better Total asset tumover Net sales/total assets Near to 2 (46298195/22985163) - .85 2.01 is better (46298195/1235161)- Inventory turnover sales/inventory 6.15 Higher Good 37.48 the better Receivables (46298195/843094) sales/accounts receivable Higher 9.82 turnover Good -54.91 the better Total debt ratio (6300000/22985163) - total debt total assets .52 Lower Good 0.274 the better Debt equity Ratio total debt/total equity (6300000/13177254) 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 camed Higher 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 to (2317789/46298195) = Income after tax/ sales 5.10% Average 5% indistry ratio Better Return on assets Income after tax/total assets (2317789/22985163) =10.08% than 9.53% Good industry Better Return on equity Income after tax/total (2317789/13177254) than equity 15.14% Good =17.59% industry 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