Reference no: EM132068924

You have been hired as an analyst for sterling professional consult and your team is working on an independent assessment of DD food inc. (DDF Inc). DDF Inc is a firm that specializes in the production of freshly imported farm products from France. Your assistant has provided you with the following data for DDF Inc and their industry. Ratio 2017 2016 2015 industry average Long term debt 0.45 0.4 0.35 0.35 inventory turnover 62.65 42.42 32.25 53.25 depreciation/total asstes 0.25 0.014 0.018 0.015 days sales in receivables 113 98 94 130.25 debt to equity 0.75 0.85 0.9 0.88 profit margin 0.082 0.07 0.06 0.75 total asset turnover 0.54 0.65 0.7 0.4 quick ratio 1.028 1.03 1.029 1.031 current ratio 1.33 1.21 1.15 1.25 interest cover 0.9 4.375 4.45 4.65 equity multiplier 1.75 1.85 1.9 1.88 a. In the annual report to the shareholders, the CEO of DDF Inc wrote, 2017 was a good year for the firm with respect to our ability to meet our short –term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short term marketable securities). Is the CEO correct? Explain and use only relevant information in your analysis. b. What can you say about the firm’s asset management? be as complete as possible given the above information ,but do not use any irrelevant information. c. You are asked to provide the shareholders with an assessment of the firm’s solvency and leverage be as complete as possible given the above information, but do not use irrelevant information.