Reference no: EM132539790
Question 1. What does the calculation of each ratio represent?
Question 2. How does year one compare with year two, and what trend can be seen when you compare the two years?
Question 3. Is the trend from year one to year two positive or negative?
Question 4. What are the possible reasons for the trend?
Question 5. What recommendations do you have for turning a negative trend to a positive trend?
Ratio Year 1 Year two
Current Ratio 3.12:1 2.96:1
Quick Ratio 1.34:1 1.02:1
Receivables Turnover 9.7 times 10.2 times
Inventory Turnover 2.4 times 2.3 times
Profit Margin 11.4% 12.6%
Asset Turnover 1.21 times 1.22 times
Return on Assets 13.7% 15.4%
Return on Equity 28.5% 29.3%
Price-Earnings Ratio 1.4 times 12.4 times
Debt Ratio 50.2% 45.3%
Times Interest Earned 9.6 times 13.0 times