Problem #1 (Ratios): Tom's Fresh Market is a family owned produce and garden market servicing the northwest side of Chicago. Founded in 1980, Tom's provides the freshest produce by supporting local farm industry and buying direct. With over 100 years in combined grocery service experience among its management and staff, Tom's is committed to presenting its broad ethnic clientele with types of products and produce that are not available at typical food chain stores, IT sells wholesale to other stores, restaurants, and caterers who look for the same thing shoppers want farm fresh healthy produce combined with variety that serves most ethnic groups. Tom's largest competitors are Whole Foods but their prices are much lower. Using the financial statements provided (at the end), please answer the following questions Income Statement (Millions of $) Balance Sheet (Millions of $) Assets Cash and securities Accounts receivable Inventones 2019 $2,145.00 $8,970.00 $12,480.00 $23,595.00 Total current assets Net plant and equipment Total assets Net sales Operating costs except depreciation Depreciation Earnings before interest and taxes (EBIT) Less interest Earnings before taxes (EBT) Taxes Net income 2019 $58,500.00 $54,698.00 $1,025.00 $2,779.00 $829.00 $1,950.00 $682.00 $1,268.00 $15,405.00 $39,000.00 Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity $7,410.00 $4,290.00 $5,460.00 $17,160.00 $7,800.00 $24,960.00 $5,460.00 $8,580.00 $14,040.00 $39,000.00 Other data: Shares outstanding millions) Common dividends (millions of $) Intrate on notes payable & L-T bonds Federal plus state income tax rate Year-end stock price 500 $443.63 6.25% 35% $30.42 1. Tom's management values the following five ratios. Please calculate the following ratios nd show your work a. Current ratio b. Days sales outstanding (use a 365 day calendar year) c. Times interest earned (TIE) d. Return on equity (ROE) 2. Suppose that Tom's competitor is Whole Foods and its ratios are as follows. Write a brief essay recommending whar Tom might consider doing to gain a competitive edge gainst Whole Foods 2 Current ratio = 1.5x b. Dayu sales outstanding = 15 days c. Times interest earned 4.0 d. Return on equity = 8% 21 Page