Problem 3-13 Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2016 (Thousands of Dollars) Accounts payable Cash 225,000 $601,866 Notes payable Receivables 1,575,000 326,634 Inventories 1,125,000 Other current liabilities 525,000 Total current assets $2,925,000 $1,453,500 Total current liabilities Net fixed assets 1,350,000 Long-term debt 1,068,750 Common equity 1,752,750 Total liabilities and equity Total assets $4,275,000 $4,275,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2016 (Thousands of Dollars) $7,500,000 Sales Cost of goods sold 6,375,000 Selling, general, and administrative expenses 825,000 Earnings before interest and taxes (EBIT) $300,000 Interest expense 111,631 bre taxes (EBT) Earnings 188,369 Federal and state income taxes (40%) 75,348 $ Net income 113,022 a. Calculate the indicated ratios for Lozano. Round your answers to two decimal places. Ratio Lozano Industry Average Current assets/Current 2.0 liabilities 35.0 days Days sales outstanding* days COGS/Inventory 6.7 Sales/Fixed assets 12.1 Sales/Total assets 3.0 Net income/Sales 1.2% Net income/Total assets 3.6% Net income/Common equity 9.0% Total debt/Total assets 30.0% 60.0% Total liabilities/Total assets *Calculation is based on a 365-day year. b. Construct the extended Du Pont equation for both Lozano and the industry. Round your answers to two decimal places For the firm, ROE is For the industry, ROE is c. Outline Lozano's strengths and weaknesses as revealed by your analysis blank Problem 3-13 Comprehensive Ratio Analysis Data for Lozano Chip Company and its industry averages follow. Lozano Chip Company: Balance Sheet as of December 31, 2016 (Thousands of Dollars) Accounts payable Cash 225,000 $601,866 Notes payable Receivables 1,575,000 326,634 Inventories 1,125,000 Other current liabilities 525,000 Total current assets $2,925,000 $1,453,500 Total current liabilities Net fixed assets 1,350,000 Long-term debt 1,068,750 Common equity 1,752,750 Total liabilities and equity Total assets $4,275,000 $4,275,000 Lozano Chip Company: Income Statement for Year Ended December 31, 2016 (Thousands of Dollars) $7,500,000 Sales Cost of goods sold 6,375,000 Selling, general, and administrative expenses 825,000 Earnings before interest and taxes (EBIT) $300,000 Interest expense 111,631 bre taxes (EBT) Earnings 188,369 Federal and state income taxes (40%) 75,348 $ Net income 113,022 a. Calculate the indicated ratios for Lozano. Round your answers to two decimal places. Ratio Lozano Industry Average Current assets/Current 2.0 liabilities 35.0 days Days sales outstanding* days COGS/Inventory 6.7 Sales/Fixed assets 12.1 Sales/Total assets 3.0 Net income/Sales 1.2% Net income/Total assets 3.6% Net income/Common equity 9.0% Total debt/Total assets 30.0% 60.0% Total liabilities/Total assets *Calculation is based on a 365-day year. b. Construct the extended Du Pont equation for both Lozano and the industry. Round your answers to two decimal places For the firm, ROE is For the industry, ROE is c. Outline Lozano's strengths and weaknesses as revealed by your analysis blank