Following are theauditor's calculations of several key ratios for Cragston Star Products. The primary purpose of this information is to understand theclient's business and assess the risk of financialfailure, but any other relevant conclusions are also desirable.

Key Ratios

Ratio 2016 2015 2014 2013 2012

1.Current ratio 2.08 2.26 2.51 2.43 2.50

2.Quick ratio 0.97 1.34 1.82 1.76 1.64

3.Times interest earned 3.50 3.20 4.10 5.30 7.10

4.Accounts receivable turnover 4.20 5.50 4.10 5.40 5.60

5.Days to collect receivables 86.90 66.36 89.02 67.59 65.18

6.Inventory turnover 2.03 1.84 2.68 3.34 3.36

7.Days to sell inventory 179.80 198.37 136.19 109.28 108.63

8.Net sales divided by tangible assets 0.68 0.64 0.73 0.69 0.67

9.Profit margin 0.13 0.14 0.16 0.15 0.14

10.Return on assets 0.09 0.09 0.12 0.10 0.09

11.Return on equity 0.05 0.06 0.10 0.10 0.11

12.Earnings per share $4.30 $4.26 $4.49 $4.26 $4.14

a.

What major conclusions can be drawn from this information about thecompany's future?

b.

What additional information would be helpful in your assessment of thiscompany's financialcondition?

c.

Based on the key ratiosgiven, which aspects of the company do you believe should receive special emphasis in theaudit?