Case #32 Read the following case carefully and answer the case questions. Show all of your work for possible partial marks. As you are aware from Challenge 6, Never Give Up (NGU) DIY Workshops was to be sold to an investor group (to... us!). Prior to selling the business, it is important to get a good idea of the past performance and the future potential of the business as a going concern. Your accountant has put together and provided you with the following financial ratios to help your analysis. Review the information and answer the following questions about NGU: Main Industry - Financial Ratios Year 9 Year 102 CompetitorA verage Year 102 Year 10 Current ratio 13.99 13.07 3.10 3.15 Quick ratio 11.03 10.66 2.89 2.94 Debt to Total Assets 0.92 0.93 0.71 0.652 Times interest earned 1.50 2.10 1.95 1.67 Debt-to-equity ratio 11.64 13.45 10.27 - 5.14 -Profit Margin 2.46% 4.91% 4.16% 3.75% - Return on Total Assets 1.53% 3.32% 5.89% 4.57% - Return on Equity 19.34% 47.97% 31.17% 20.64% Retained Earnings -$366,603 -$379,665 $158,956 NA 31.12 What do the ratios suggest about:- 1. Liquidity? Explain. (3 marks) 2. Capital structure and debt/coverage? What do they suggest about the long-term health of the company? Can they continue along the same path? Explain. (3 marks) 3. Profitability? Explain (2 marks) 4. The future of the business and business model? Is the growth of this company financially sustainable? If so, why? If not, why not and how could it become more financially sustainable? (2 marks)