36 days 39 days Below are the financial ratios calculated from the 2020 annual report of PVC Pipes Ltd. Ratio 2020 2019 Current 1.52x 1.48x Quick 1.01% 0.98x Average collection period 65 days 58 days Days inventory held 28 days Days payable outstanding 61 days 47 days Cash conversion cycle 40 days Fixed asset turnover 4,91% 4.02x Total asset turnover 1.70x 1.43x Debt to total assets 67.10% 63.08% Long Term debt to total capitalization 46,82% 42.51% Times interest camed (5.10) 1.65x Fixed charge coverage (2.34x) 1.40x Cash flow adequacy 0.32x 0.87% Gross profit margin 10.10% 12.81% Operating profit margin (5.93%) 2.75% Net profit margin (4.98%) 0.91% Cash flow margin 3.84% 7.00% Return on assets (8.63%) 1.28% Return on equity (25.49%) 3.51% Cash retum on assets 6.90% 9.10% REQUIRED: Using the financial ratios above, illustrate the short-term liquidity, operating efficiency, capital structure and long-term solvency and profitability of PVC Pipes Ltd (40 marks)