Question 4: (08 Marks) ABC Limited: Balance Sheet As on December 31, 2008 Cash Rs.7,750 Account payable Rs. 12,900 Receivables 33,600 Notes payable 8,400 Inventories 24 150 Other current liabilities 11,700 Total current assets 65,500 Total current liabilities 33,000 Net fixed assets 29,250 Long term debt 25,650 Common equity 36,100 Total 94,750 Total 94,750 ABC Limited: Income Statement for year ended December 31, 2008 Sales 160,750 Cost of goods sold: 139 250 Gross profit 21,500 Selling, general and administrative expenses 14,500 Earnings before interest and taxes (EBIT) 7,000 Interest expenses Earnings before taxes (EBT) 4,550 Federal and state income taxes (40%) 1,820 Net Income 2,730 RATIO BUCKNER INDUSTRY AVG. Current assets/current liabilities 2.Ox Days sales outstanding 35 days Sales/inventories 6.7x Sales/total assets 3.Ox Net income/sales 1.2% Net income/total assets 3.6% Net income/equity 9.0% Total debt/total assets 60.0% 2,450 Required: a. Calculate the indicated ratios for ABC Limited b. Outline ABC Limited strength and weakness as revealed by your analysis