a. Does Werner Beauty seem to prefer to finance its assets with debt or with equity?

b. A supplier to Werner Beauty sells merchandise to them and asks to be paid within 60 days. While any of Werner Beautys financial ratios might be of interest to the supplier, which of the ratios listed below do you think would likely be the most important one to the supplier?

c. Which of the ratios presented suggest that, compared to its industry, Werner Beauty may have a problem controlling its operating expenses?

Data for Werner Beauty and its industry.

Financial Ratios Werner Beauty Industry

Current ratio. 2.1 0.9

Quick ratio 1.9 0.5

Inventory turnover 6.1 X 5.8 X

Operating profit margin 10.1% 13.0%

Debt ratio. 41.5% 25.9%

Return on equity 20.6% 17.4%