Analyze its overall financial situation from both a cross$-$sectional and a time$-$series viewpoint. Break your analysis into evaluations of the firm's liquidity, activity, debt, profitability, and market.

Historical and Industry Average Ratios for Sterling Company

Ratio Actual $2013$ Actual $2014$ Industry average $2015$

Current ratio $1\mathrm{.}41\mathrm{.}551\mathrm{.}85$

Quick ratio $1\mathrm{.}000\mathrm{.}921\mathrm{.}05$

Inventory turnover $9\mathrm{.}529\mathrm{.}218\mathrm{.}60$

Average collection period $45\mathrm{.}6$ days $36\mathrm{.}9$ days $35\mathrm{.}5$ days

Average payment period $59\mathrm{.}3$ days $61\mathrm{.}6$ days $46\mathrm{.}4$ days

Total asset turnover $0\mathrm{.}740\mathrm{.}800\mathrm{.}74$

Debt ratio $0\mathrm{.}200\mathrm{.}200\mathrm{.}30$

Times interest earned ratio $8\mathrm{.}27\mathrm{.}38\mathrm{.}0$

Fixed$-$payment coverage ratio $4\mathrm{.}54\mathrm{.}24\mathrm{.}2$

Gross profit margin $0\mathrm{.}300\mathrm{.}270\mathrm{.}25$

Operating profit margin $0\mathrm{.}120\mathrm{.}120\mathrm{.}12$

Net profit margin $0\mathrm{.}0620\mathrm{.}0620\mathrm{.}053$

Return on total assets $($ROA$)0\mathrm{.}0450\mathrm{.}0500\mathrm{.}042$

Return on common equity $($ROE$)0\mathrm{.}0610\mathrm{.}0670\mathrm{.}066$

Earnings per share $($EPS$)1\mathrm{.}752\mathrm{.}201\mathrm{.}50$

Price$/$earnings $($PE$)$ ratio $12\mathrm{.}010\mathrm{.}511\mathrm{.}2$

Market$/$book $($M$/$B$)$ ratio $1\mathrm{.}201\mathrm{.}051\mathrm{.}10$