2020	Industry
Profit margin	6%	10%
Return on assets	13%	17%
Return on equity	19%	23%
Receivables turnover	12.2 X	11.6 X
Average collection period	30	31
Inventory turnover	8.5 X	1.1 X
Capital asset turnover	12.2 X	2.8 X
Total asset turnover	7.5 X	7.9 X
Current ratio	2.2 X	2.4 X
Quick ratio	1.6 X	1.5 X
Debt to Total Assets ratio	45%	53%
Times interest earned	4.7 X	3.9 X

Use the above ratios to answer the following independent questions (3 marks each):

Question 1. You are a commercial loans officer. (a) Would you grant a 10-year loan to Alpha? Answer: Select: AnswerYesNo (b) Select the best two ratios (and only two) that support your answer from the list below:

Profit Margin

Inventory Turnover

Times Interest Earned

Debt to Total Assets

Current Ratio

Question 2. Your company sells product to Alpha. (a) Would you grant short-term credit (terms: n/30 days) to Alpha? Answer: Select: AnswerYesNo (b) Select the best two ratios that support your answer from the list below:

Times Interest Earned

Quick ratio

Return on Equity

Debt to Assets ratio

Receivables Turnover

Question 3. You are an investor. Alpha has offered to sell you 10% of the common shares. (a) Would you buy the shares? Answer: Select: AnswerYesNo (b) Select the best two ratios that support your answer from the list below:

Return on Equity

Capital Asset Turnover

Current Ratio

Inventory Turnover

Profit Margin