#2)

Your accountant has provided you with the following financial ratios to help your analysis. Review the information and answer the following questions about the company:

Financial Ratios	Year 9	Year 10	Main Competitor Year 10	Industry Average Year 10
Current ratio	12.77	10.22	3.10	3.15
Quick ratio	9.37	8.28	2.89	2.94
Debt to Total Assets	0.65	0.61	0.51	0.55
Total Asset Turnover	0.48	0.50	1.15	1.05
Times interest earned	3.27	4.48	5.95	4.67
Debt-to-equity ratio	1.87	1.58	1.09	1.14
Profit Margin	14.00%	16.87%	17.16%	12.75%
Return on Total Assets	6.71%	8.43%	10.89%	8.27%
Return on Equity	19.27%	21.75%	17.17%	18.64%
Retained Earnings (accumulated)	-$67,075	$5,837	$6,956	N/A

What do the ratios suggest about:

a) Liquidity of the company? Explain.

b) Operations and the leveraging of our assets? Explain.

c) Capital structure and debt/coverage of the company? What do they suggest about the long-term health of the company? Can the company continue along the same path? Explain.

d) What about the profitability of the company?