Silver Cloud Computing is a company that provides cloud computing services. The company commenced operations on March 1, 2016. It acquired financing from the issuance of common stock for $40,000,000 and issuance of 4% bonds that mature in 2026 for $30,000,000. The income statements and balance sheets for the first two years are provided in a separate Excel spreadsheet. All amounts are in thousands. Required: The Chief Executive Officer (CEO) is interested in increasing sales and decreasing expenses. You have been requested to prepare a report that provides analysis of the financial statements and recommendations to improve the financial performance of the company.

1. Calculate the following ratios and provide an analysis of the company based on the ratios:

a. Days Sales Outstanding

b. Profit Margin

c. Asset Turnover

d. Return on Assets

e. Financial Leverage

f. Return on Equity

g. PPE Turnover

h. Total Liabilities to Equity

i. Times Interest Earned

SILVER CLOUD COMPUTINGG Income Statements For the Years Ended February 28, 2018 and 2017 fye 2/28/2018 (in thousands) fye 2/28/2017 (in thousands) Sales Sales Discounts Net Sales 225,000 3,375 221,625 200,000 2,500 197,500 Wages and Salaries Bad Debt Expense Depreciation Marketing Expense Occupancy Expense Research & Development Total Expenses 73,500 2,100 20,000 33,750 54,000 22,500 205,850 70,000 2,000 20,000 30,000 54,000 20,000 196,000 Income from Operations 15,775 1,500 Interest Expense 1,200 1,200 Income Before Taxes 14,575 300 Income Taxes (40%) 5,830 120 Net Income 8,745 180