Financial Decision Making

You have been hired as a financial analyst for Cranwell Banking Institute (CBI) and your team is working on an independent assessment of Check and Trade Inc. Check and Trade Inc. is a firm that specializes in the production of pet supplies from China. Your assistant has provided you with the following data derived from the financial statements of Petsin Inc and their industry.

RATIO	2019	2018	2017	2019 - Industry Average
Long term debt	0.45	0.40	0.35	0.35
Inventory turnover	62.65	42.42	32.25	53.25
Total Assets	0.25	0.014	0.018	0.015
Days' Sales in receivable	113	98	94	130.25
Debt to Equity	0.75	0.85	0.90	0.88
Profit Margin	0.082	0.07	0.06	0.075
Total Asset Turnover	0.54	0.65	0.70	0.40
Quick Ratio	1.028	1.03	1.029	1.031
Current Ratio	1.33	1.21	1.15	1.25
Times Interest earned	0.9	4.375	4.45	4.65
Equity Multiplier	1.75	1.85	1.90	1.88

Required: a. In the annual report to the shareholders, the CEO of Petsin Inc wrote, 2019 was a good year for the firm with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short-term marketable securities). Is the CEO correct? Explain and use only relevant information in your analysis. b. What can you say about the firm's asset management? Be as complete as possible given the above information, but do not use any irrelevant information.