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In order to bring you up to speed with Garcia Energys current situation, you have been asked to assess Garcia Energys financial performance during 2020 and its financial position at year-end 2020. To complete this assignment, you have gathered the firms 2020 financial statements (below). In addition, your assistant obtained the firms ratio values for 2018 and 2019, along with the 2020 industry average ratios. During the year, lease payments were $50,000, while sinking fund payments were $25,000.

Garcia Energy Income Statement Year Ending December 31, 2020
Sales Revenue		$6,075,000
Less: Cost of Goods Sold		-4,000,200
Gross Profit		$2,074,800
Less: Operating Expenses
Selling Expense	$650,000
General and Administrative	$326,000
Lease payments	$ 50,000
Depreciation	$152,000
Total Operating Expenses		$1,178,000
Operating Profit		$ 896,800
Less: Interest Expenses		- 99,500
Net profit before taxes		$ 797,300
Less: Taxes		$ 318,920
Net Profit after taxes		$ 478,380
Earnings per share: $4.78 Dividends per share: $4.58

Ratio	Actual 2018	Actual 2019	Actual 2020	Industry Average 2020
a. Current ratio	1.7	1.8	2.5	1.5
b. Quick ratio	1.0	0.9	1.3	1.2
c. Inventory turnover (times)	5.2	5.0	5.5	10.2
d. Days sales outstanding (DSO)	50.7 days	55.8 days	47.1 days	46 days
f. Debt-to-assets ratio	45.8%	52.8%	61.9%	24.5%
h. Times interest earned ratio	10.2	10.9	9.0	12.5
j. Net profit margin	6.0%	7.2%	7.9%	1.2%
l. Return on common equity (ROE)	21.1%	26.3%	35.9%	17.9%
m. Price/earnings (P/E) ratio	9.8	10.2	11.3	10.1
n. Market value/book (M/B) ratio	3.2	3.36	4.02	3.5

In Executive Summary evaluate the firms strength and weaknesses. Break your analysis down into evaluations of the firms liquidity, asset management, debt, profitability, and market ratios.

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