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Precision 2020 2019 Industry Ratio Unit Ratio Liquidity: Current ratio Acid-test ratio times times 1.9 1.0 1.72 0.82 2.31 1.35 Asset Management: 20.5 19.73 Accounts
Precision 2020 2019 Industry Ratio Unit Ratio Liquidity: Current ratio Acid-test ratio times times 1.9 1.0 1.72 0.82 2.31 1.35 Asset Management: 20.5 19.73 Accounts receivable turnover Accounts receivable turnover in days 22.6 16.15 17.8 18.5 Times per year Days Times per year Days Times per year 5.9 6.5 6.56 8.02 Inventory turnover Inventory turnover in days 61.86 55.6 45.5 1.48 1.33 Total asset turnover Solvency: Times per 4.2 2.24 3.52 Times interest earned Debt ratio year % 39.5 42.43 45.54 Profitability: Net profit margin Return on assets Return on total equity % % % 3.8 5.6 9.5 1.83 4.5 4.2 6.5 10.71 6.3 a. Analyze each ratio in liquidity, assess Precision's liquidity position and explain how it compares with the industry average. (3 marks) b. Analyze each ratio in assets management, assess Precision's assets management position and explain how it compares with the industry average. (6 marks) c. Analyze each ratio in solvency, assess Precision's debt management position and explain how it compares with the industry average. (3 marks) d. Analyze each ratio in profitability, Assess Precision's profitability position and explain how it compares with the industry average (4 marks) Hint: Assess each ratio (trend, comparison with industry ratio, and meaning, and make a conclusion in each area: liquidity, assets management, solvency and profitability. Avoid repeating words
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