How has the firms liquidity changed from 2017 to 2016?

Compute the current ratio & quick ratio and determine if the firms liquidity has increased or decreased?

What are some implications for this result?

How has the firms long-term solvency changed from 2017 to 2016?

Compute the debt ratio and determine if the firm has increased or decreased leverage?

Compute the firms times-interest earned & cash coverage ratio?

Can the firm easily make their interest payments?

DATA

Industry Statistics for 2017

Ratio	Industry Average
Short Term Solvency Ratios
Current Ratio	4.1 times
Quick Ratio	2.1 times
Long Term Solvency Ratios
Debt Ratio	45%
Times Interest Earned	6.5 times
Asset Management Ratios
Inventory Turnover	7.4 times
Days Sales Outstanding	32.1 days
Total Asset Turnover	2.1 times
Profitability Ratios
Profit Margin	4.7%
Return on Assets	12.6%
Return on Equity	17.2%
Market Value Ratios
P/E ratio	13.0 times
Market-to-Book Ratio	2.0 times

Years Ending December 31(millions of dollars, except per share data)
	2017		2016
Net Sales		$1,500.0		$1,435.0
Cost of goods sold		(1,230.0)		(1,176.7)
Gross profit		$270.0		$258.3
Fixed operating expenses except depreciation		(90.0)		(85.0)
Depreciation		(50.0)		(40.0)
Earnings before interest and taxes (EBIT)		$130.0		$133.3
Interest		(40.0)		(35.0)
Earning before taxes (EBT)		$90.0		$98.3
Taxes (40%)		(36.0)		(39.3)
Net income		$54.0		$59.0
Preferred dividends		0.0		0.0
Earnings available to common stock holders (EAC)		$54.0		$59.0
Common dividends		(29.0)		(27.0)
Additions to retained earnings		$25.0		$32.0
Per share Data:
Shares outstanding		25.00		25.00
Common stock price		$23.00		$23.00
Earnings per share		$ 2.16		$ 2.36
Dividends per share		$ 1.16		$ 1.08

Table 1: Unilate Textiles: December 31 Comparative Balance Sheets (millions of dollars)
	2017		2016
Assets
Cash and marketable securities		$15.0		$40.0
Accounts receivable		180.0		160.0
Inventory		270.0		200.0
Total current assets		$465.0		$400.0
Gross plant and equipment	$680.0		$600.0
Less: Accumulated depreciation	(300.0)		(250.0)
Net plant and equipment		380.0		350.0
Total assets		$845.0		$750.0
Liabilities and equity
Accounts payable		$30.0		$15.0
Accruals		60.0		55.0
Notes payable		40.0		35.0
Total current liabilities		$130.0		$105.0
Long-term bonds		300.0		255.0
Total liabilities		$430.0		$360.0
Common stock		130.0		130.0
Retained earnings		285.0		260.0
Owner's equity		$415.0		$390.0
Total liabilities and equity		$845.0		$750.0
NOTE: Unilate has no preferred stock, so owner's equity includes common equity only.