each year. The Company's golf products are designed for golfers of all skill levels including amateur and professional golfers. Callaway Golf generally sells its products to retailers, directly and t confidence in future economic conditions, and the availability of consumer credit. Purchases of these firms' products may decline during periods when Board of Directors regarding the current financial picture of the firm, following the release of the firm's Audited Financial Statements. Drive It Long Golf, performance. Financial Ratios, Drive It Long Golf, Inc. 2015 2016 11 1.15 0.65 0.68 0.43 0.42 Period 0.88 8.93 23.09 2015 2016 0.37 0.38 0.580.6 1.58 1.6 Period 5.73 7.99 Period 11.94% 10.53% 16.85% Short-term solvency ratios: a. Current ratio b. Quick ratico c. Cash ratic Asset utilization ratios: d. Total asset turnover e. Inventory turnover f. Receivables turnover Long-term solvency ratios: g. Total debt ratio h. Debt-equity ratio i. Equity multiplier i Times interest earned ratio k. Cash coverage ratio Profitability ratios: I. Profit margin m. Return on assets n. Return on equity Table 1. Financial Ratios, Drive It Long Golf, Inc. Drive It Long, Inc. Statement of Cash Flows for 2016 Cash, beginning of the year $26,450 Operating activities Net income $50,376 Plus: Depreciation Increase in accounts payable Increase in other current liabilities $37053 4,883 5,161 Less: ($4,589) (4,655) $88,229 Increase in accounts receivable Increase in inventory Net cash from operating activities Investment activities Fixed asset acquisition Net cash from investment activities Financing activities Increase in notes payabie Dividends paid Increase in long-term debt Net cash from financing activities Net increase in cash Cash, end of year $78,233) ($78,233) ($2,340) (20,000) 15,000 ($7,340) $2,656 $29,106 Table 2. Statement of Cash Flows, Drive it Long, Inc. 2014 and 2015 Balance Sheets 2014 2015 2014 2015 Current assets Current Liabilities Cash $26,450$29,106 13.693 18.282 27931 32.586 5,84013,500 15,280 20,441 $61,722 $69,426 $95,000 $110,000 Other Total Total Long-term debt equity $45,000 $45,000 223,517 253,893 $268,517 $298,893 paid-in surplus ulated Net plant &$357,165 $398,.345 $425.239 $478,319 owners equity Table 3. Balance Sheets, Drive It Long Golf, Inc. Drive It Long, Inc. 2015 Income Statement Sales $422,045 $291.090 37.053 $93,902 $16,400 77,502 27,126 $50,376 $20,000 30,376 Cost of Goods Sold Depreciation Earnings Before Interest and Taxes Interest Paid Taxable Income Taxes (35%) Net Income Dividends Retained Eamings Table 4. Income Statement, Drive It Long Golf Inc. Table 4. Income Statement, Drive It Long 1. Analyze the financial performance of Drive It Long Golf, Inc. using the following tools: a. time and trend analysis b. peer-group analysis c two or more ratios financial ratios (introduced in Module Two's assigned readings) in aspects of performance i. Short-term solvency ii. Asset Utilization ili. Long-term solvency iv. Profitability 2. Evaluate the firm's fnancial position using the firm's DuPont identity, considering: a operating efficiency (as measured by profit margin), c. financial leverage (as measured by the equity multiplier). a. Construct Drive It Longs PEG ratio, and b, asset use efficiency (as measured by total asset turnovern, and b. asset use efficiency (as measured by total asset turnover), and 3. Determine PEG ratio. b. Evaluate this PEG ratio. Callaway Golf Company was in publicly traded in 1982 with the purpose of designing, manufacturing and selling high quality golf clubs. The Company beca of golf clubs to one of the leading manufacturers and g amateur and professional golfers. Callaway Golf generally sells its products to retailers, directly and through its service marks in exchange for a royalty fee to third parties for use on golf related eyewear and practice aids. The Company' assignment, assume that you focus is Drive It Long, which is a close competitor to Callaway Golf. Drive It s products are sold in the United States and in over 100 countries around the world. For purposes of this more willing to make discretionary purchases of golf products during favorable economic conditions and when consumers are confidence in future economic conditions, and the regarding future economic prospects that adversely affect consumer discretionary spending would have a negative This paper is an exercise designed to better acquaint students with the four main categories of ratio analysis. Financlal ratios are a standardized means of This exercise requires students to compute common financial ratios in the r ratio characterizes, and where this information can be found in financial statements. The student will additionally be asked impact on these firm's results of operations, financial condition and cash flows four areas in which these are most often applied to analyze firm performance. This will strengthen the student's ability to understand what aspects of a Board of Directors regarding the current financial picture of the firm. following the release of the firm's Audited Financial Statements. Drive it Long Golf, of the firm's recent