OverviewFinancial ratio analysis is an important tool that businesses use to evaluate their performance and to help determine how to best manage their resources. Businesses use this analysis to safeguard their financial health and to ensure that they provide reasonable returns to shareholders. Financial ratios are tools that help companies, investors, and other stakeholders analyze the relationships between different pieces of financial information found on a company’s financial statements. Financial ratios are used to assess four dimensions of a company’s financial situation: profitability, asset management, debt burden, and liquidity. Financial forecasts are future predictions of a company’s financial performance. They are used by start-up companies as well as established firms with operating histories. Companies forecast their performance as reflected in their expected future financial statements. The most critical forecast with respect to a company’s survivability is its expected cash flow over the periods forecasted.What You’ll Need Your MacBook Pro laptop Internet access MS Word softwarePrepare Complete the Week 2 Review assignment. Part 1 – Download the Week 2 Project Financial Statements document from the Downloads section. Part 1 – Download the Week 2 Project (Part 1) Answer Sheet. Part 2 – Download Project 2_Part 2Template. EBS160_Project2(Part1)AnswerSheet1_MW2_Feb7.docx32 KB Week2ProjectFinancialStatements.pdf107 KB EBS160_Project2Part2Template_MW2z_Feb7.xlsx52 KBCreatePart 1Using the Week 2 Project Financial Statements for The Disney Company and Apple Inc. download document, complete the Week 2 Project (Part 1) Answer Sheet. Include the following information: Calculate both companies’ asset turnover ratios for 2017 and 2016. Show your computations. Calculate both companies’ net profit margins for 2017 and 2016. Show your computations. Calculate both companies’ debt ratios for 2017 and 2016. Calculate both companies’ return on equity ratios for 2017 and 2016. Calculate both companies’ current ratios for 2017 and 2016.Part 2In this part of the assignment you will helpdevelop a financial forecast for a newentertainment company calledThe 2Live Venue.This is a smalllive music venue, where indie bands perform in front of a live audience four times each week.Your goals are to make the business profitable within 2 years on the income statement and ensure that the business raises enough money on the capital investments page so that it never runs out of cash (which can be determined on the cash flow statement).You will first demonstrate that the 2Live Venue is likely to break even and earn a profit within two years. To do this, open the Excel workbook within the Project 2 Part 2 Template. You will then input the appropriate numbers in the yellow highlighted cells of the Sales Projections and Capital Investments tabs. Since the financial statements are interconnected, information input in the Sales Projections and Capital Investments cells will automatically update information on the Income Statement and Cash-Flow Statement tabs. No input is required on the Marketing Budget and Capital Expenses tabs, as these expenses cannot be changed.Sales Projections:If the venue capacity is 300 seats, and the venue starts out at 50% capacity during the first quarter, what unit volume should you expect, and how many tickets does this translate into in each quarter during the two years? (Shows are 4 nights per week, 4 weeks per month, 3 months per quarter, over the course of the two-year forecasted period.) (50% x 300 x 4 x 4 x 3) In Excel enter this as: =(0.5*300*4*4*3)Enter this information on the “Sales Projections” tab of the workbook in the “Unit Volume” under the ticket sales revenue stream for Quarter 1.Now that you have completed Quarter 1, show some growth over time in the ticket sales unit volume line. In the other quarters, use the same formula you just used =(50% x 300 x 4 x 4 x 3), but change the percentage of seats sold in each quarter, as follows:For Quarter 2: 55% of seats soldFor Quarter 3: 58% of seats soldFor Quarter 4: 67% of seats soldFor Quarter 5: 63% of seats soldFor Quarter 6: 68% of seats soldFor Quarter 7: 80% of seats soldFor Quarter 8: 88% of seats soldNote: beverages and merchandise have automatic formulas that are based on ticket sales.Income Statement:On the “Income Statement” tab, notice at the bottom of the statement what the net profit or net loss is for each quarter throughout the two years. The business should show a total profit for the two years of $179,792.65.Cash-Flow Statement:Look at the “Cash-Flow Statement” tab of the workbook. Determine how much money needs to be raised so that there are no months with end-of-month negative cash flow. Notice that the “Cash Flow at End of Month” is negative throughout the two years. This is like a bank account balance. If it goes below zero, it means the business is projected to run out of cash and cannot operate. Therefore, cash at the end of the month must always be positive to keep the business alive long enough for it to break even on the income statement.Find the largest negative number on this statement (the biggest negative number). This is the amount of capital (money) the business needs to raise from owners and investors to keep it operational. You should see the number (343,476).Now, let’s show in our projections that we are raising this amount of money from the owner and an investor.Capital Investments:Click on the “Capital Investments” tab in the workbook.