Using the financial statements of Mindful Heath presented in Exhibit A, Exhibit B and Financial Performance Data in Exhibit C attached to this assignment, answer the following four questions.

1. Calculate three (3) profitability ratios and three (3) efficiency ratios of Mindful Health. Mindful's financial statement for 2016 is in Exhibit A and Exhibit B. Assume there is no interest or taxes. (6 marks - each ratio correctly calculated is 1 mark)

2. Define what each ratio from question A represents and compare 2016 and 2015 results. (9 marks)

3. Compare the Mindful Health Services' 2016 efficiency and profitability ratios calculated in Question 1, to the whole industry's efficiency and profitability ratios provided in Exhibit C. (3 marks)

4. Explain what are some of the potential problems and limitations of the financial ratio analysis? (2 marks)

Exhibit A Mindful Health Services Income Statement For the year ended December 31, 2016 (in $ thousands) 2016 2015 $7,950 $ 7,000 Sales (all on credit) Cost of goods sold Gross profit Operating Expenses Depreciation Earnings before interest and taxes 5,600 2,350 350 750 5,100 1,900 500 600 1,250 800 Interest Earnings before taxes Taxes (25%) Net income 654 596 274 500 300 200 322 10