Compute deep water financial ratios

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Deep Water Experts Company wants to expand its retail business into the GCC countries. Before doing that, it needs to have clear picture about company's current situation as well as its strengths and weaknesses, to determine whether the company is ready for this ambitious plan. The company has hired you to advise them on the current status of the company's financial health. After rooting through old bank statements, sales receipts, tax returns, and other records, you have assembled the information in the statements below. You are requested to do following things:

Question 1. Compute Deep Water's financial ratios for 2011 and 2012. Briefly interpret the change in the company's liquidity, activity, debt and profitability ratios.

Question 2. Using the financial ratios (median values) from the retail industry (Sporting Goods) as a benchmark, determine Deep Water's liquidity, activity, debt and profitability ratios. Briefly interpret your results.

Question 3. In your judgment, is the company is ready for the planned expansion or not?

Reference no: EM132578209

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