Q2. Analyze the firms current financial position from both a cross-sectional and a time-series viewpoint. Break your analysis into evaluations of the firms liquidity, activity, debt, profitability, and market. (10 marks) ( 2 marks each category)

Q3. Summarize the firms overall financial position on the basis of your findings in part b ( 4 marks )

Subject: FINANCIAL MANAGEMENT

Please answer my questions

Historical and Industry Average Ratios + + + 6.64 + Summary of Company Ratios (2004-2005, Including 2006 Industry Averages) INDUSTRY AVERAGE 2004 2005 2006 RATIO Overall Liquidity Current ratio + 2.04 2.08 2.0542 Quick (acid-test) ratio- 1.324 1.46 1.4342 Activity Inventory turnover- 5.74 5.74 Average collection periode 43.8DAYSH 51.2 DAYS+ 44.3 days Average payment periode 75.8 days 81.2 days 66.5 days Total asset turnovere 0.94 0.794 0.7544 Debt Debt ratio- 36.80% 44.30% 40.00% Times interest earned ratio- 5.6+ 3.3 4.34 Fixed-payment coverage ratio- 2.4 1.4 1.54 Gross profit margin- 31.40% 33.30% 30.00% Operating profit margin 14.60% 11.80% 11.00% Net profit margin- 8.20%- 5.40% 6.20% Earnings per share (EPS) $3.26 $1.81 $2.26 Return on total assets (ROA) 7.80% 4.20% 4.60% Return on common equity (ROE) 13.70% 8.50% 8.50% Market Price/earnings (P/E) ratio- 10.5 104 12.5 Market/book (M/B) ratio- 1.25 0.854 1.34 le