3. Compare the performance of Pinjarra Air Limited to the industry. For each ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an inventory ratio calculated as inventory divided by current liabilities. How do you think Pinjarra Air Limited’s ratio would compare to the industry average?

Chris Guthrie was recently hired by Pinjarra Air Limited to assist the company with its financial planning and to evaluate the company’s performance. Chris graduated from university five years ago with a finance degree. He has been employed in the finance department of a large Australian company since then.
Pinjarra Air was founded 10 years ago by friends Mark Sexton and Todd Story. The company has manufactured and sold light aeroplanes over this period, and the company’s products have received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who own and fly their own aeroplanes. The company has two models: the Birdie, which sells for $103 000, and the Eagle, which sells for $178 000.

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Pinjarra Air Limited 2020 Statement of profit or loss Revenue $46298 115