1. AAA Company is a telecommunication company. The Table below presents some financial ratios of this company in comparison with those of the telecommunication industry in 2021.

	AAA Company	Telecommunication industry
Current ratio	1.9	1.52
Quick ratio	1.7	1.23
Days of Receivable	50 days	70 days
Inventory turnover	7	5
Fixed asset turnover	4	6.5
Total asset turnover	0.7	0.9
Debt to Assets ratio	0.7	0.71
Debt to Equity ratio	1.77	1.85
Gross Profit Margin	30%	28%
Net profit Margin	-7%	-1%
ROE	-20%	-2.50%
ROA	-4.90%	-0.90%

Evaluate the financial position of AAA Company using financial ratio analysis. Based on your analysis, which factors are likely to cause a greater loss in AAA Company than the industry? (25 marks)

2. Based on the ratios presented in the Table below, use Dupont Analysis to identify the key drivers for ROE for AAA Company and for the telecommunication industry. (15 marks)

	AAA Company	Telecommunication industry
ROE	-20%	-2.50%
ROA	-4.90%	-0.90%
Net Profit Margin	-7%	-1%
Total Asset Turnover	0.7	0.9
Leverage (total assets/equity)	4.08	2.78