I am need of assistance with the cells in yellow.

5.1 SAA 1/3/2017 EARTHWEAR CLOTHIERS Ratio Analyses December 31, 2016 December 31 2012 2013 2014 2015 2016 2016 Expected Actual (Audited) (Audited) (Audited) (Audited) (unaudited) WIB Difference Industry DITETETTCE Average (from 20461 Expected 1.641.43 .1.92.... 1.80 .1.94... 2.17 . 0.23 ... 0.07 SHORT-TERM LIQUIDITY RATIOS: Current Ratio current assets / current liabilites Quick Ratio liquid assets/ current liabilities Operating Cash Flow Ratio cash fow from operations / current liabilities 0.39 0.44 0.62 0.53 0.65 0 .73 0.80 -0.07 0.69 0.42 0.810 .340. 400.40 ACTIVITY RATIOS: .. 71.18 ...77.25.74.3473.82_75.41 118.00 42.60.. .. 5.134.734.914.944.843.09. . 14.10 -11.01 Receivables Turnover... net sales / net ending receivables Days Outstanding in Accounts Receivable 365 days / receivables turnover Inventory Turnover cost of sales / inventory Days of Inventory on Hand 365 / (cost of sales / inventory) ..3.43. 4.27.4.4.4.4 4.99 ......-1.12.... . 6.20 .-2.33 106.4185.5181.4081.72_69.22. .............. ... 36.29 44.95% 44.91% 44.89% 42.51% 42.49%........43.90% . ..1.41%. ..38.80%...5.10% 4.26% 1.24% 0.96% PROFITABILITY / PERFORMANCE RATIOS: Gross Profit Percentage gross proft/ net sales Profit Margin net income / net sales Return on Assets net income / total assets Return on Equity net income / total owners' equity 2.34% 14.80% 3.61% 6.84% 3.64% 10.53% 2.37% 6.83% 3.02% 4.69% 7.40% . 3.77% 26.43% 12.86% 16.22% 11.03% 5.92% 16.70% 10.78% . 17.50% -0.80% 0.61 0.51 0.50.. .001. . COVERAGE RATIOS: Debt to Equity ..0.79...0.88.0.58 total abilities / shareholders investment Times Interest Earned 53.88 26.31 26.41 (net income + interest expense) / interest expense 23.92 10. 19 5 0.57 40.38 N/A N/A * Expected values are obtained by using the forecast function in Excel (using the row of data from 2012 and 2015 to obtain the expected value for 2016). Industry Source: Dun & Bradstreet (D8.B). The median values of the industry ratios are used for comparison purposes. For ratios not specifically included on D&B, ratios were calculated from average financial statement data provided. NA = not available or could not be calculated from financial data. EARTHWEAR CLOTHIERS Preliminary Analytical Procedures Summary of Ratio Analyses & Assessment of Financial Condition December 31, 2016 1. Comments and Summary Based on your review of work paper 5-1, list one or two rafos in each of the following categories that you believe increase the risk of potential misstatement. Explain why you believe the risk is increased and identify possible causes of a potential For example, "Days of Inventory on Hand" increased significantly indicating merchandise is held in inventory for a longer period than prior years and it is also held for a longer period than the industry average. This increases the risk of SHORT-TERM LIQUIDITY RATIOS: Enter your response here (This cell will expand automatically to ft your response - use ALT+ENTER to begin a new line) ACTIVITY RATIOS: Enter your response here (This cell will expand automatically to ft your response - Use ALT+ENTER to begin a new line) PROFITABILITY / PERFORMANCE RATIOS: Enter your response here (This cell will expand automatically to fit your response - Use ALT+ENTER to begin a new line) COVERAGE RATIOS: Enter your response here (This cell will expand automatically to fit your response - use ALT+ENTER to begin a new line) 2. Assessment of Financial Position Based on your review of work paper 5-1, assess the clients ability to continue as a going concern to stay in business) by responding to the following questions. A. Identify ratios and trends, if any, that cause concern about the client's ability to continue as a going concern Enter your response here (This cell will expand automatically to fit your response - use ALT+ENTER to begin a new line) B. Identify ratios and trends, if any, that indicate a high likelihood that the client will continue successfully as a g Enter your response here (This cell will expand automatically to fit your response - use ALT+ENTER to begin a new line) C. Assess the client's financial condition as one of the following (select one from the drop down list in cell B35) Click on the yellow cell above and the drop down list button will appear in the far right side of the cell. Your selection will then appear in this box. You can change your selection using the drop down list. D. Briefly explain the reasoning behind your assessment. Enter your response here (This cell will expand automatically to fit your response - Use ALT+ENTER to begin a new line)