Question 3 (35 points) The following is the income statement for the year ended October 31, 2019 and the balance sheet as of October 31, 2019 for M & K Design Limited. Also included is some additional information to assist you in your calculations and analysis: I M & K Design Limited Income Statement For Year Ended October 31, 2019 Sales Cost of goods sold Depreciation expense Operating expenses $1,700,000 884,000 816,000 65,000 527.700 223,300 8,000 215,300 30,000 $185,300 Interest expense Income before tax Income tax expense M&K Design Limited Balance Sheet October 31, 2019 Assets Cash $22,000 Accounts receivable 122,000 Inventory 96,000 240,000 Furniture and Equipment 700,000 Accumulated depreciation - furniture and equipment (300,000) Long term investment 125,500 525.500 $765,500 Liabilities & Shareholder's Equity Liabilities Accounts payable Salary payable Income tax payable $158,000 12,000 30,000 200,000 75,000 275,000 Bank loan (long-term) Shareholder's Equity 50.000 Liabilities & Shareholder's Equity Liabilities Accounts payable Salary payable Income tax payable $158,000 12,000 30,000 200,000 75.000 275,000 Bank loan (long-term) Shareholder's Equity Common shares Retained earnings 50,000 440,500 490,500 $765,500 Selected data from October 31, 2018 financial statements: Total assets $683,500 Accounts receivable $107,500 Inventory $ 60,000 Accounts payable $175,000 9 & 10. Payables turnover and days payables outstanding 11. Cash conversion cycle 12. Current ratio Cost of goods sold Average accounts payable and 365 Accounts payable turnover Days inventory outstanding +days sales outstanding - days payables outstanding Current assets Current liabilities Cash + short-term investments + current receivables Current liabilities Total liabilities Total assets Income from operations Interest expense 13. Quick ratio 14. Debt ratio 15. Times interest earned