The balance sheet and the income statement of Omega Company in is given above:

1. Define and calculate: working capital, current ratio, acid-test ratio, cash to current liabilities ratio, days in receivables (based on ending accounts receivables), days sales in inventory (based on cost of goods and ending inventory), operating cycle, total debt to equity ratio, and times interest earned. For calculations, assume that a year amounts for 360 days.
2. Due to significant changes to the financial environment in one of Omegas markets, it is expected that the average collection period will increase to 50 days. Omega is in the process of negotiating a long-term loan and the CFO is concerned on the credit outlook of the company. The CFO has decided to reduce cash and cash equivalents to 400.000. However, further actions are needed. You are asked to examine two extreme scenarios. The first is to decrease inventories, and the other is to hold back Omegas payments by increasing the accounts payable. Assume all other amounts as the same. Argue on the anticipated new strategy of Omega company and propose, if there, any other proposals complementary to Omegas new strategy.

\begin{tabular}{|l|c|l|c|} \hline Assets & 2021 & \begin{tabular}{l} Liabilities \& Stockholders' \\ Equity \end{tabular} & 2021 \\ \hline Fixed assets & & Stockholders' equity & \\ \hline \begin{tabular}{l} Property, plant and \\ equipment \end{tabular} & 10,000,000.00 & Common stock & 4,900,000.00 \\ \hline \begin{tabular}{l} Less accumulated \\ depreciation \end{tabular} & (4,000,000.00) & Retained earnings & 1,000,000.00 \\ \hline \begin{tabular}{l} Net property, plant and \\ equipment \end{tabular} & 6,000,000.00 & Total stockholders' equity & 5,900,000.00 \\ \hline Total fixed assets & 6,000,000.00 & Long - term liabilities & \\ \hline Current assets & 600,000.00 & Total long-term liabilities & 3,000,000.00 \\ \hline Cash and cash equivalents & 700,000.00 & Current liabilities & \\ \hline Marketable securities & 1,500,000.00 & Accounts payable & 600,000.00 \\ \hline Accounts receivables & 2,000,000.00 & Short-term debt & 2,000,000.00 \\ \hline Inventory & 700,000.00 & Total current liabilities & 2,600,000.00 \\ \hline Prepaid expenses & 5,500,000.00 & Total liabilities & 5,600,000.00 \\ \hline Total current assets & 11,500,000,00 & \begin{tabular}{l} Total liabilities \& \\ stockholders' equity \end{tabular} & 11,500,000.00 \\ \hline Total assets & & Long-rm debt & 3,000,000.00 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline \multicolumn{2}{|c|}{ Income Statement 2021 } \\ \hline Sales & 18,000,000.00 \\ \hline Cost of goods & (13,000,000.00) \\ \hline Gross margin & 5,000,000.00 \\ \hline Selling and administrative expenses & (3,600,000.00) \\ \hline Net operating income & 1,400,000.00 \\ \hline Interest expense & (500,000.00) \\ \hline Income before taxes & 900,000.00 \\ \hline Income taxes (25\%) & (125,000.00) \\ \hline Net income & 775,000.00 \\ \hline \end{tabular}