You have been hired as an analyst for PAST Consulting, and your team is working on an independent assessment of Daffy Duck Food Plc (DDF Plc). DDF Plc is a company that specialises in the production of freshly imported farm products from France and Belgium. Your assistant has provided you with the following data for DDF Plc and their industry.

Requie:

a. In the annual report to the shareholders, the CEO of DDF Plc wrote, “20x7 was a good year for the company 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, trade 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 company’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 company’s solvency and leverage. Be as complete as possible given the above information, but do not use any irrelevant information. Note that depreciation is quite a large expense.