Question

pleaaaz i need help answering the three questions on the second photo. please thank you!

lo would compare to the traverse Frances and Logo Farol Planning PART 2 90 SAS AIR, INC 2018 Income Statement 345 -hows planes. The company has ells for S103.000, and the whole Cost of goods sold Omer expenses Depreciation 2014 at companies. S&S Air prefabricated parts, the com of an airplane is only five deposito cach order, as the for $17.000 Although the are different from con builds aircraft to order pany can complet weeks. The or ao roce payment order is complete. In Cont mercial airplane my to manufacture once the ordered ark and Todd have provided the follo ment. Chris has gathered the industry ratios plane manufacturing industry $ 3.000 1729 $ 2311 e and one ballo Nincome Dividends Add to retained earnings $ 705.000 1,612,789 SESAR.INC 2013 Bilance Sheet Current assets Ca Accounts receivable Inventory Total current assets $ 524963 843 094 1.235.161 $ 2603 218 Liabilities and Equity Current liabilities Accounts payable Notes payable Total current liabilities $ 1,068,394 242952 $ 3.5079 Long-term debt $ 6,300 000 Fixed assets Net plant and equipment $20 381.945 Shareholder equity Common stock Retained earnings Total equity Total abilities and equity $ 460,000 12,717 254 $13,177,254 $22.985.163 Total assets $22.985.163 Light Airplane Industry Ratio Lower Quartie 50 21 08 .68 4.89 6.27 Current ratio Ladisk ratio- Ofis ratio otal asset turnover - Umientory turnover Receivables turnover - og debt ratio Lot-equity ratio- awy multiplier nos interest earned - ash soverage ratio De margin- poumon assets - Cum on equity - Median 1.43 35 21 85 6.15 9.82 52 1.08 2.08 8.06 9.41 5.10% 953% 15.14% Quartie 1.89 .62 39 1.38 10.89 14.11 61 cturers QUESTIONS 1. Using the financial statements provided for S&S calculate each of the ratios listed in the table for the Light aircraft industry This pe of mpar 1 Bocir2 Would Income com Why not an airftr ir cox urante un Discus er it is opr to use anies: Ebart, Embr rporatinn, and Cesar 3 formance S Air mmea whimi e seg Je to in ratio cala 156 2.56 .68 1.68 5.18 584 4.05% 9.83 10.27 7.15% 13.21% 19.15% industry . views Suppose 6.05% 9.93% y curreal SES

Answer 1

Calculation of ratios given

Ratio	Formula	Calculation	Industry	Comment	Bais
Current ratio	Current assets/ Current Liabilities	(2603218/3507909) =0.74	1.43	Bad	Higher the better
Quick ratio	(Current assets-Inventory)/ Current Liabilities	(2603218-1235161/3507909)=0.39	.35	Average	Higher the better
Cash Ratio	Cash and cash equivalents/ Current Liabilities	(524963/3507909) =0.15	.21	bad	equal to 1 is better
Total asset turnover	Net sales/ total assets	(46298195/22985163) = 2.01	.85	good	Near to 2 is better
Inventory turnover	sales / inventory	(46298195/1235161)= 37.48	6.15	Good	Higher the better
Receivables turnover	sales / accounts receivable	(46298195/843094) =54.91	9.82	Good	Higher the better
Total debt ratio	total debt/ total assets	(6300000/22985163) = 0.274	.52	Good	Lower the better
Debt equity Ratio	total debt/ total equity	(6300000/13177254) =0.48	1.08	Good	Lower the better
equity multiplies	total assets/ total equity	(22985163/13177254) =1.74	2.08	good	range between 1 and 1.5
Times interest earned	EBIT/ INterest expense	(3815434/725048) =5.26	8.06	good	Higher the better
Cash coverage ratio	Total cash/ interest expense	(524963/725048) =0.72	9.41	Bad	Interest cannot be paid for short term
Profit margin	Income after tax/ sales	(2317789/46298195) = 5%	5.10%	Average	IS equal to indistry ratio
Return on assets	Income after tax/ total assets	(2317789/22985163) =10.08%	9.53%	Good	Better than industry
Return on equity	Income after tax/ total equity	(2317789/13177254) =17.59%	15.14%	Good	Better than industry

PAragraph I: Every ratio is useful but its useness depends on the nature of the user. Whenever an investor or a layman looks on these ratios , then it looks first on its profit margin to know the outcome of benefits from business. Also, he looks on return on equity as well to get the better information on invested funds. If a bank or money lender will look, then its total debt ratio, and capacaity fo pay interest will be seen. It will look at its current ratio, cash ratio and quick ratio. So, being an investor i will look on retuen on equity and profit margin of the company.

Paragraph II:In the given information, i cannot see any data for other comparable companies.