Item	Peer Average
Debt to Equity	50%
Interest Coverage	31 times
ROE	27%
ROA	26%
Gross profit margin	60%
Net profit margin	18.5%
Inventory turnover period	70 days
Settlement period for debtors	28 days
Settlement period for creditors	60 days
Asset Turnover	1.3 times
Current ratio	1.4 times
Quick ratio	1 times

Category	2019	2020	2021
	(555 552) / 1755 = 0.0017094	(568 554) / 2068 = 0.00676983	(680 445) / 2480 = 0.09475806
	225 / 1755 = 0.12820513	381 / 2068 = 0.18423598	757 / 2480 = 0.30524194
	(257 + 8) / 1755 = 0.15099715	(359 + 14) / 2068 = 0.1803675	(673 + 22) / 2480 = 0.28024194
	(720 x 1.23) / 652 = 1.35828221	(800 x 1.17) / 729 = 1.28395062	(845 x 1.26) / 720 = 1.47875
	2350 / 1755 = 1.33903134	2150 / 2068 = 1.03965184	2650 / 2480 = 1.06854839
	= 0.00205128	= 0.0081238	= 0.11370967
	= 0.17948718	= 0.25793037	= 0.42733872
	= 0.4982906	= 0.59521275	= 0.9247984
	= 0.81496933	= 0.77037037	= 0.88725
	= 1.33903134	= 1.03965184	= 1.06854839
Altmans Z score:	= 2.83382973	= 2.67128913	= 3.42164518

Question 2 (18 Marks)

Analyse the data in the above tables 1, 2 & 3 to establish a picture of the financial viability of FINCORP. For each ratio discuss the level and trend, and then delve deeper. Look at the components of each ratio, interrelationships between ratios, peer averages, standard benchmarks and patterns in the data that are worth noting and that may help to form a clearer picture of FINCORP. Based on this analysis, your calculation of Z-scores and margin of safety, summarise your findings and state whether you believe that FINCORP should be targeted in the banks campaign. Make clear any areas of concern or critical areas for improvement. Provide guidance as to what questions FINCORPs management should be asked and what further research is required in order to gain a clearer picture of the business.

In constructing your analysis, use the following headings:

Introduction

Analysis of financial data

Questions for management and further research required

Suggestions for business improvement and enhancement of credit quality

Summary and Decision¹