Q2) Consider the financial statement of Kmart Given in the table below

Kmart
Income Statement	2010	2090
Net Operating revenues	816500	808800
Cost of goods sold	648400	647400
Gross profit	186500	160600
Selling, general and administrative expenses	143300	124100
Operating Income	43200	36500
Interest expense	3800	3500
Other Income (loss) net	400	500
Income before taxes	39800	33500
Income taxes	12900	11500
Other expenses	1100	600
Net Income	35900	34200
Balance Sheet
Assets	2010	2009
Cash and Cash equivalents	14300	11700
Short term investments	0	0
Net receivables	7500	6300
Inventories	59700	55300
Total Current assets	87000	78400
Property, plant and equipment	184200	153100
Goodwill	29100	24500
Other assets	7100	5800
Total assets	307300	261500
Liabilities and Stockholder Equity	2010	2009
Accounts payable	91000	76300
Short-term debt	8900	12300
Other current liability	200	200
Total current liability	100100	76300
Long-term debt	65600	55300
Other liabilities	13900	12500
Total liabilities	179400	156400
Stockholder equity	9500	4300

1. Calculate the financial ratios of Kmart in 2010 and 2009 show your working.

Financial Ratio	Formula	2010	2009
Return on Equity (ROE)			7,95
Return on Asset (ROA)			0,13
Percentage of assets invested in inventory (INVT))			21,15%
Inventory Turnover (INVT))			11,71
Days of inventory (DOI)			31,18
Days sales outstanding (DSO)			2,84
Days purchases outstanding (DPO)			43,02
Cash-to-cash Cycle (C2C)			-9,00

B. (5 points) Analyze the change between the years 2009 and 2010 in term of financial ratios. Which financial ratios would you check to evaluate the performance of inventory management and cash management? Which year is better in terms of inventory management and cash management?