SECTION A You are the Financial Director of A Hotel. According to normal practice, you will be awarded a special bonus if the net income growth could be maintained at 20% in each year. In the middle of 2020, a competitor entered and affected the business seriously. Based on the following financial statements (actual of 2020 and forecast of 2021), answer questions 1 to 9 in this section. (Show your workings clearly, and round the figures to one decimal place) 2020 actual 1,300,000 675,000 625,000 A Hotel is now required to raise additional capital fund through debt financing. The bank will require its potential clients to meet a series of financial ratios based on their projected financial results of next year in order to determine the eligibility for obtaining the long-term bank loan. 2021 projected 930,000 564,000 366,000 A Hotel Income Statements in dollars) For the Year Ended 31 Dec Sales Cost of goods sold Gross profit Operating Expenses Salaries and Wages Depreciation Rent Insurance Miscellaneous Utilitites Operating income Interest expense Income before income taxes Income taxes Net income 180,000 5,000 93,000 22.000 150,000 5,000 96,000 24,000 14.400 36,000 20,000 34,000 354,000 271,000 13,200 257,800 55.600 202,200 21.5 6. Give the five (5) needs of capital funding. (10 marks) 7. With reference to the financial ratios' requirement indicated below by the bank, calculate all the ratios for A Hotel. (20 marks) Financial Ratios Requirement (a) Current ratio 21.5 (b) Quick ratio (c) Total assets to total liabilities ratio 2.5 (d) Debt-to-equity ratio 50.7 (e) Net return on assets 5% (1) Net income to revenue 25% (g) Inventory turnover 23 times (h) Cost of goods sold percentage