Assignment / Task: Analyse and Answer to all 8 questions

Format: Maximum 5pages content only (precise, concise and snappy with meaningful complete sentences),

A & R 17-4 Ratio analysis Rhondda McNabb always asks her adviser in-depth questions before acquiring a company's shares. Rhondda is currently considering investing in Simpson Scientific Corp. Simpson's annual report contains the following summary of ratios: 2020 2019 2018 Net sales trend . 128.00% 1 17 00% 100.00% Selling expenses to net sales 9.8% 13.7% 15.3% Quick ratio. 0.8 to 1 1.1 to 1 1.2 to 1 Current ratio .. 2.6 to 1 2.4 to 1 2.1 to 1 Inventory turnover .... 7.5 times 8.7 times 9.9 times Accounts receivable turnover 6.7 times 7.4 times 8.2 times Return on equity. 9.75% 11.50% 12.25% Profit margin.. 3.3% 3.5% 3.7% Total asset turnover ... 2.9 times 3.0 times 3.1 times Return on total assets 8.8% 9.4% 10.1% Net sales to PPE assets 3.8 to 1 3.5 to 1 3.3 to 1 Rhondda would like answers to the following questions about the trend of events over the three-year period covered in the annual report. Rhondda's questions are: 1. Is it becoming easier for Simpson to pay its current debts on time and to take advantage of cash discounts? 2. Is Simpson collecting its accounts receivable more rapidly? 3. Is Simpson's investment in accounts receivable decreasing? 4. Are dollar amounts invested in inventory increasing? 5. Is Simpson's investment in PPE assets increasing? 6. Is the shareholders' investment becoming more profitable? 7. Is Simpson using its assets efficiently? 8. Did the dollar amount of selling expenses decrease during the three-year period