Question 2: Using the financial statements for XYZ Engineering Ltd, calculate the following financial ratios, and discuss what they mean. Show all calculations. Quick Ratio Debt to Equity Ratio Profit margins - before and after taxes XYZ Engineering Ltd. Balance Sheet as at December 31, 20XX ASSETS CURRENT ASSETS Cash Accounts Receivable Prepaid Expenses Total Current Assets $2,780 $3,100 $6,260 LIABILITIES CURRENT LIABILITIES Bank Accounts Payable Total Current Liabilities $4,000 $1,500 $5,500 $12,140 Fixed Assets Equipment Furniture Long Term Liabilities Contracts Payable Shareholders Loan Total Long Term Liabilities Total Liabilities $2,000 $1,000 $4,200 $2,050 $3,000 $9,250 -$2,400 Automobile $3,000 $8,500 Subtotal less Depreciation Total Fixed Assets $6,850 Equity Share Capital Retained Earnings Total Equity $6,000 $4,490 $10.490 TOTAL ASSETS $18,990 TO TAL LIABILITIES & EQUITY $18.990 XYZ Engineering Ltd. Profit and Loss Statement for the period ending December 31, 20xx REVENUES Sales $96,000 EXPENSES Rent Wages Office Supplies Advertising Insurance Courier expenses Interest Utilities Depreciation $600 $37,000 $2,000 $2,000 $1,000 $2,000 $2,000 $300 $1,700 $48,600 Profit before taxes Income Taxes $47,400 -$18.960 Net Profit after taxes $28,440