Question 1 (50 marks) XYZ Limited is a reputable listed company selling electronic components. The following is the summarized data of the company's balance sheets and income statements: XYZ Limited Selected Balance Sheets Data 31 December 2020 and 2019 (in millions) Current assets Other assets Total assets 2020 s 1,000 2.900 3.900 2019 $ 600 2.900 3,500 Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity Data of current assets: Accounts receivable 700 1,100 2.100 3.900 500 1,000 2.000 3.500 450 360 XYZ Limited Selected Income Statements and Other Data For the Years Ended 31 December 2020 and 2019 (in millions) 2020 s Sales 5,000 Cost of goods sold 3.000 Operating income 500 Interest expense 100 Net income 400 2019 S 4.000 2,400 400 80 320 40 Other data: Average number of common shares outstanding 50 Total dividends paid 300 240 Market price of common share 120 120 John Wong, who is approaching 60 years old and will retire in January 2022. plans to use his spare funds of $1,000,000 to purchase the common shares of XYZ Limited as an investment. (a) Calculate the following financial ratios for XYZ Limited for 2020 and 2019 (round your computation to two decimal places, where applicable) (1) Retum on Total Assets. (11) Return on Equity. (iii) Current Ratio. (iv) Average Collection Period for Accounts Receivable. (v) Debt Ratio. (vi) Debt to Equity Ratio. (vii) Earnings per Common Share. (viii) Dividend Yield (ix) Gross Profit Margin. (x) Times Interest Earned Ratio. (30 marks) (b) Based on the above financial ratios, analyse and discuss (i) the profitability and liquidity of the company as well as (ii) the suitability of the company as an investment for John. (20 marks)