Question 1 Question 1: Which is a better ratio to measure an entity's operational efficiency for all financial stakeholders (lenders and owners)? i) EBIT/Assets(bop). ii) NI/Assets(bop)? Oi) O ii) For Questions 2 and 3, consider these financial statements for SmallCo: TTM Q4 Smallco Balance Sheet ($K) Cash AR Inventory net PPE Total Assets Quarter Q3 Q2 49.50 49.01 9.80 9.60 5.05 49.00 48.51 113.30 112.17 50.00 10.00 5.00 50.00 115.00 Q1 49.01 9.80 5.15 49.01 9.80 5.00 47.54 111.49 5.15 47.54 111.49 15.00 AP Other Current Liabilities Debt (all long term) Total Liabilities Equity 15.00 15.00 20.00 50.00 65.00 15.00 19.80 49.80 63.50 15.00 15.30 20.00 50.30 14.70 15.30 20.20 50.20 61.29 14.70 15.30 20.20 50.20 61.29 61.87 TTM Quarter Q3 Q4 Q2 Smallco Income Statement ($K) Revenue COGS SGA EBT 100.00 70.00 20.00 10.00 2.00 100.00 68.60 20.00 100.00 67.91 20.20 11.89 2.40 9.49 Q1 102.00 66.56 20.20 15.24 3.00 12.24 402.00 273.07 80.40 48.53 9.70 Tax Net Income 11.40 2.30 9.10 8.00 38.83 Question 2 Question 2: What is SmallCo's annualized Q2 ROE? Question 2 Question 2: What is SmallCo's annualized Q2 ROE? U Question 3 Question 3: What is the company's TTM ROA? 0.35 Not enough info is provided to answer this question. O 0.34 O 0.63 Consider these financial statements for another company, coincidentally also called SmallCo: Smallco Balance Sheet ($K) Cash AR Inventory net PPE Total Assets Year Ending 12/31 20x0 20X1 50.00 55.00 10.00 15.00 5.00 5.00 50.00 60.00 115.00 135.00 Smallco Income Statement ($K) Revenue COGS SGA EBT Tax @16.7% Net Income Year Ending 12/31 20xo 20X1 100.00 110.00 70.00 75.00 20.00 23.00 10.00 12.00 1.67 2.00 8.33 10.00 AP Other Current Liabilities Debt (all long term) Total Liabilities Equity 15.00 15.00 20.00 20.00 15.00 25.00 60.00 75.00 50.00 65.00 Question 4 Did this Smallco's Profit Margin improve from 20X0 to 20x1? Answer Yes or No and provide one reason. The ratio decreased O No Yes The ratio increased Question 5 What was the company's asset efficiency ratio in 20X1