Purpose of Assignment This activity helps students recognize the significant role accounting plays in providing financial information to management for decision making through the evaluation of financial statements. This experiential assignment requires students to use ratios to evaluate and analyze a company's liquidity solvency, and profitability. Two-Rivers Inc. (TRI) manufactures a variety of consumer products. The company's founders have run the company for thirty years and are now interested in retiring. Consequently, they are seeking a purchaser, and a group of investors is looking into the acquisition of TRI. To evaluate its financial stability, TRI was requested to provide its latest financial statements and selected financial ratios. Summary information provided by TRI is presented below. TRI Statement of Income For the Year Ended November 30, Year 2 (In thousands) Sales (net.. Costs and expenses: Cost of goods sold Selling and administrative expense Depreciation and amortization expense. Interest expense.. Total costs and expenses $31,000 17,600 3,550 1,890 900 23,940 7,060 2,900 $4.160 Income before taxes Income taxes. Net Income. TRI Balance Sheet As of November 30 (in thousands) Year 2 Year 1 $ 500 200 Cash Marketable securities (at cost) Accounts receivable (net) Inventory Total current assets 400 500 3,200 5,800 9,900 7.100 $17.000 2,900 5,400 9,000 7,000 $16,000 Property, plant, & equipment (net). Total assets. Accounts payable Income taxes payable Accrued expenses Total current lia bilities Long-term debt Total liabilities. Common stock $(1 par value). Paid-in capital in excess of par Retained eamings... Total stockholders' equity Total liabilities and stockholders' equity $3,700 900 $3,400 800 1.400 5,600 1.800 7,400 2,700 1,000 4,900 8,600 $16,000 1,700 6,300 2,000 8.300 2,700 1,000 5,000 8,700 $17,000 Year1 Year 0 Current Ratio 1.61 1.60 Quick Ratio Times Interest Earned Debt to 0.64 8.55 0.86 0.65 8.60 0.75 Equity Inventory Turnover 3.21 3.17 Required: a. Calculate the select financial ratios for the fiscal year Year 2. (use excel) b. Interpret what each of these financial ratios means in terms of TRI's financial stability and operating efficiency Click the Assignment Files tab to submit your assignment