This question is based on the information provided for Great Oaks Furniture, a retail furniture and design firm. You are expected to review the financials from the point of view of a large group of companies planning to acquire this company by investing in major equity stake of the company. Great Oaks Furniture Balance Sheet December 31, 2020 December 31, 2019 Great Oaks Furniture Balance Sheets Assets Current Assets: Cash Accounts receivable Inventory Prepaid expenses Total current assets Building and equipment, net Total assets $41,200 570,000 5,070,000 83,800 5,765,000 1,097,000 $6,862,000 $53,000 443,000 4,841,000 78,000 5,415,000 1,095,000 $6,510,000 Liabilities and Stockholders' equity Current liabilities: Accounts payable Bank loan payable Other accrued payables Total current liabilities Long-term debt Total liabilities Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $604,000 679,000 213,000 1,496,000 1,729,000 3,225,000 $624,000 625,000 313,000 1,562,000 1,797,000 3,359,000 1,359,000 2,278,000 3,637,000 $6,862,000 1,359,000 1,792,000 3,151,000 $6,510,000 Great Oaks Furniture Income Statement Year Ended December 31, 2020 $5,568,000 2,840,000 2,728,000 Year Ended December 31, 2019 $5,253,000 2,627,000 2,626,000 Net sales Cost of goods sold Gross margin Operating expenses: Selling expenses General and administrative expenses Total operating expenses Operating income Interest expense Income before taxes Income taxes Net income 501,000 835,000 1,336,000 1,392,000 139,000 1,253,000 439,000 $814,000 630,000 788,000 1,418,000 1,208,000 158,000 1,050,000 368,000 $682,000 1. What is your judgement about the profitability of the business? You may calculate and comment on the appropriate financial ratios for 2019 and 2020, in your answer. Based on that indicate your view about the overall profitability of the business. Discuss the factors which could have contributed to the given outcome. ( 6 marks) 2. What is your judgement about the current asset management of the business? Calculate accounts receivable turnover, debtors collection period, inventory turnover, and stock holding period in your discussion. How well does Great Oaks Furniture appear to manage its accounts receivable and inventory? What suggestions do you have for the company? ( 6 marks) 3. Calculate and comment about the short-term financial health and long term financial health of the business based on the appropriate financial ratios for 2019 and 2020. (6 marks) 4. Based on the above evaluation make an overall evaluation on whether this is an attractive company to take over. (5 marks) 5. Discuss any other areas that you would like to investigate or information which you would like to request before making the final decision. (2 marks) You may use Excel for your computation. The submission should be in the form of a PDF or Word document