No.2 (a): XYZ company shows the following performance in terms of financial indicators for the last three years. (7+3)

Ratio

2020 2019 2018 2020 Industry Average

Long-term debt 0.55 0.45 0.35 0.35

Inventory Turnover 62.00 42.45 32.25 52.25

Depreciation/Total Assets 0.25 0.013 0.018 0.015

Days sales in receivables 112 97 95 130

Debt to Equity 0.70 0.85 0.90 0.86

Profit Margin 0.080 0.07 0.06 0.075

Total Asset Turnover 0.50 0.65 0.70 0.45

Quick Ratio 1.0 1.03 1. 29 1.03

Current Ratio 1.45 1.20 1.15 1.20

Times Interest Earned 0.10 3.375 3.45 3.65

Required:

Comment on the performance of the XYZ company by making comparison with the previous years as well as from industry?

(b): How financial and non-financial indicators help the investors to judge the firms performance?

2020 Ratio 2020 2019 2018 Industry Average 0.55 0.45 0.35 0.35 Long-term debt Inventory Turnover Depreciation/Total 62.00 42.45 32.25 52 25 0.25 0.013 0.018 0.015 Assets 112 97 Days' sales in receivables 93 130 0.70 0.85 Debt to Equity Profit Margin 0.90 0.86 0.080 0.07 0.06 0.075 Total Asset Turnover 0.50 0.65 0.70 0.45 Quick Ratio 1.0 1.03 1.29 1.03 Current Ratio 1.45 1.20 1.13 Times Interest Farned 0.10 3.375 3.45 3.65