Q5. Using the information in the Balance Sheet and Profit and Loss Statement below, calculate the following ratios and answer the questions (8 points in total) Safeway Stores Comparative Balance Sheets Amount 2019 2018 $ $ 74,442 75,574 105,166 91,6421 1,563,244 1,433,254 118,537 128,676 1,861,389 1,729,146 Increase or Decrease Percentage $ % (1.132) (1.50) 13,524 14.76 129,990 9.07 (10,139) (7.88) 132,2431 7.65 Assets Current Assets Cash and short-term investments Receivables Merchandise inventories Prepaid expenses and other current assets Total Current Assets Property Land Buildings Leasehold improvments Fixtures and equipment Transport equipment Property under capital lease 236,876 210,427 345,001 305,006 557,504 459,711 2,023,914 1,789,136 186,485 173.576 1,144,409 1,155,493 4,494,189 4,093, 349 1,894,333 1,731,138 2,599,856 2,362,211 16,588 16,557 59,396 66,4491 4,537,229 4,174,363 26,4491 39,995 97,793 234,778 12,909 (11,084) 400,840 163,195 237,645 31 (7,053) 362,866 12.57 13.11 21.27 13.12 7.44 (0.96) 9.79 9.43 10.06 0.19 (10.61) 8.69 Less: Accumulated depreciation and ammortization Total property, net Excess of cost over net assets acquired Other Assets Total Assets 2019 2018 $ $ 44,913 50, 156 45,427 45,841 48,274 24,723 1,038,268 1,017,094 167,739 163,021 193,509 154,373 20,431 43,081 1,558,561 1,498,289 Increase or Decrease Amount Percentage $ % (5,243) (10.45) (414) (0.90) 23,551 95.26 21.174 2.08 4,718 2.89 39,136 25.35 (22,650) (52.58) 60,2721 4.02 Liabilities and Stockholders' Equity Current Liabilities Notes Payable Current obligation under capital leases Current maturities of notes and debentures Accounts Payable Accrued Salaries and wages Other accrued expenses Income Taxes Payable Total Current Liabilities Long-term Debt Obligations under capital leases Notes and Debentures Total Long-term debt Accrued claims and other liabilities Total Liabilities Stockholders' Equity Common Stock Additional Paid-in Capital Cumulative translation adjustment Retaind Earnings Total Stockholders' Equity Total Liabilities and stockholders' Equity 746,178 765,3071 646,532 422.3621 1,392,710 1,187,669 116,935 98,051 3,068, 206 2,784,009 (19,129) 224,170 205,041 18,884 284,197 (2.50) 53.08 17.26 19.26 10.21 99,756 97,933 246,964 222,851 (155,994) |(114,087) 1,278,297 1,183,657 1,469,023 1,390,354 4,537,229 4,174,363 1,823 24,113 (41,907) 94,640 78,669| 362,866 1.86 10.82 36.73) 8.40 5.66 8.69 Safeway Stores, Inc. Comparative Statements of Income Sales Cost of sales Gross Profit Operating and administrative expenses Operating Profit interest expense Other income (loss) Income before provision for income taxes Provision for income taxes Net Income Net Income per share 1) Calculate the following Liqudity Ratios 2019 2018 $ $ 19,642,201 18,585,217 15,004,547 14,249,843| 4,637,654 4,335,374 4,214,443 3,920,736 423,211 414,638 151,263 134,270 26,874 20,565 298,822 300,9331 113,811 117,630 185,011 183, 303 3.12 3.26 Increase or Decrease Amount Percentage $ % 1,056,984 5.69 754,704 5.30 302,280 6.97 293,707 7.49 8,573 2.07 16,993 12.66 6,3091 30.68 (2,111) (0.70) (3,819) (3.25) 1,708 0.93 (4.29) (0.14) Current ratio in year 2018 = Current ratio in year 2019 - Quick ratio in year 2018 - Safeway Stores, Inc. Comparative Statements of Income Sales Cost of sales Gross Profit Operating and administrative expenses Operating Profit interest expense Other income (loss) Income before provision for income taxes Provision for income taxes Net Income Net Income per share 1) Calculate the following Liqudity Ratios 2019 2018 $ $ 19,642,201 18,585,217 15,004,547 14,249,843 4,637,654 4,335,374 4,214,443 3,920,736 423,211 414,638 151,263 134,270 26,874 20,565 298,822 300,933 113,811 117,630 185,011 183, 303 3.12 3.26 Increase or Decrease Amount Percentage $ 1,056,984 5.69 754,704 5.30 302,280 6.97 293,707 7.49 8,573 2.07 16,993 12.66 6,309 30.68 (2, 111) (0.70) (3,819) (3.25) 1,708 0.93 (0.14) (4.29) Current ratio in year 2018 - Current ratio in year 2019 = Quick ratio in year 2018 - Quick ratio in year 2019 = 2) Calculate the following Solvency Ratios Debt to Equity ratio in year 2018 Debt to Equity ratio in year 2019 = Debt to Equity ratio in year 2018 - Debt to Equity ratio in year 2019 = Times interest Earned Ratios in year 2018 = Times interest Earned Ratios in year 2019 = 2) Calculate the following Profitability Ratios Retum on Invested Capital (ROIC) ratio in year 2018 = Return on Invested Capital (ROIC) ratio in year 2019 = Return on Owner's Equity (ROE) ratio in year 2018 = Return on Owner's Equity (ROE) ratio in year 2019 = Profit as Percentage of Sales ratio in year 2018 = Profit as Percentage of Sales ratio in year 2019 = 3) Based on the above ratio analysis, what conclusions/observations can you make regarding the financial situation of this company