Question Calculate (and document) suitable ratios with respect to of a) liquidity, b) solvency, c) profitability and d) efficiency BRIEFLY (maximum of 400 words) use these ratios to respond to the following 3 questions. Long rambling answers will not be graded - if you understand the ratios, you can be precise in answering. 1. If this company approached you to buy your product on your normal 30-day trade credit terms, would you extend them trade credit. Justify your agreement to sell to them or not to sell to them using financial ratios 2. If this firm approached you to lend them long term funds, would you advance funds to them. Why or why not. 3. Explain and quantify why the percentage return on equity to shareholders is significantly higher than the percentage of operating return on assets used. Data Set CUSABA INCORPORATED BALANCE SHEET AS AT DECEMBER 31, 2019 ASSETS Cash Marketable Securities Accounts Receivable Inventory Prepaid Expenses Property Plant and Equipment Goodwill Total Assets LIABILITIES AND EQUITY $27,000 Accounts Payable 7,500 Bank Loan 675,000 Accrued Expenses 487,500 Interest Payable 10,500 247,500 Common Stock 45.000 $1,500,000 $112,500 262,500 4,500 1,500 255,000 264,000 Retained Earnings 600,000 Total Liabilities and Equity $1,500,000 Long Term Bonds Payable CUSABA INCORPORATED-INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019 Sales (all on credit) Cost of goods sold Gross profit Selling and admirative expense Depreciation Operating Income Interest Expense Earnings before taxes Income Taxes Net Income $2,700,000 1,800,000 900,000 375,000 30,000 495,000 46,500 448,500 112.500 $336,000