QUESTION NO 3:

Quickfix inc has come to jeans roses for early financial check up as a first step gene has prepared a complete set of ratios for financial year 1999 and 2000 she will use them to look for significant changes in the company situation from one year to the next

Ratios 2018 2019

net working capital $55,000 $58,000

current ratio 3.25 3.00

quick ratio 2.25 2.20

inventory turnover 12.80 10.30

average collection period 42 days 31 days

total assets turnover 1.40. 2.00

debit ratio 0.45. 0.62

times interest earned 4.00. 3.85

gross profit margin 68%. 65%

operating profit margin 14% 16%

net profit margin 8.30% 8.10%

return on total assets 11.60%. 16.20%

return on equity 21.10% 42.60%

price /earning ratio 10.7 9.8

price / book ratio 1.4 1.2

Required:

1: In order to focus on the degree of change calculate the year to year percentage change in the ratio from 2018 to 2019 preserve the positive and negative sign calculate the proportional change for the ratio shown here

2: For any dress so that shows year to year differences of 10% , state whether the differences is in the company's favour or not

3: Formost significant changes (25% are more). look at the other ratios and name at least one other change that may have contribute to the change in the ratio that you are discussing.

4: Which form is m more profitable firm A with a total asset turnover of 10.0 and are net profit margin of 2% are firmB with a total asset on power of 2.0 and net profit margin after 10%? provide examples of both types of firm?

5: differentiate between

A:Debit and capital equity

B: market segmentation theory and expectation theory