In2017, HPT Company was struggling due to poor management. Since 2017, the management team has been replaced and a new streamline focused strategy has been implemented. HPT is a retailer of Jewelry with stores across Canada. Since 2017, HPT has reduced the number of retail locations in hope of saving costs and improving its financial health.

	HPT Company
	2019	2018	2017	Industry Ratios 2019
Current ratio	1.88	1.36	0.93	1.90
Inventory turnover	4.89	4.68	3.78	6.08
Average Collection Period	45.45	38.45	15.45	30.00
Capital asset turnover	2.56	1.93	1.34	3.19
Total asset turnover	1.72	1.46	1.07	2.00
Debt to total assets	35.00%	60.53%	75.25%	30.00%
Times interest earned	8.87	3.06	1.08	14.63
Gross margin	40.00%	39.00%	39.00%	42.00%
Profit margin on Revenue	5.90%	3.56%	0.25%	6.71%
Return on Total Assets	10.17%	5.21%	0.27%	13.42%
Return on Equity	15.65%	13.19%	1.09%	19.17%
Days in working capital	43.8	40.58	39.55724	N/A
Cash Conversion Efficiency	6.29%	6.18%	N/A	N/A
Cash Conversion Cycle	70.30	64.04	61.44	N/A

Required:

a. Identify 2 ratios for each category: (8 marks)

Liquidity, Solvency, Productivity, and Profitability (2 marks for each category)

b. Provide an overall trend assessment of each category (do not explain each individual ratio but instead, provide an assessment of the category): (10 marks)

Liquidity (3 marks), Solvency (2 marks), Productivity (3 marks), Profitability (2 marks)

c) The following information for HPT is provided:

	HPT Company
	2019	2018	2017
Z-Score	2.53971	1.5562	1.2341
Sustainable Growth	0.0267	(0.0180)	(0.0240)

What do the Z-score and sustainable growth numbers in the above chart mean? Has management been able to turn around the company since 2017? Explain. (4 marks)