Subject: Corporate Finance (20 marks question)

Read the following case, analyze interpret and apply the necessary corporate decisions ( find and analyze all financial ratios) in solving the given below :

Current ratio Quick ratio Cash ratio Total asset turnover Inventory turnover Receivables turnover Total debt ratio Debt-equity ratio Equity multiplier Times interest earned Cash coverage ratio Profit margin Return on assets Return on equity Chris Guthrie was recently hired by S\&S Air, Inc., to assist the company with its financial planning and to evaluate the company's performance. Chris graduated from college five ye. ago with a finance degree. Since then, he has been employed in the finance department of a Fortume 500 company. S\&S Air was founded 10 years ago by friends Mark Sexton and Todd Story. The company has manufactured and sold light airplanes over this period, and the company's products hav received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who own and fly their own airplanes. The company has two models: the Birdie, which sells for $103,000, and the Eagle, which sells for $178,000. Page 095 Although the company manufactures aircraft, its operations are different from commercial aircraft companies. S\&S Air builds aircraft to order. By using prefabricated parts, the company can complete the manufacture of an airplane in only five weeks. The company also receives a deposit on each order, as well as another partial payment before the order is complete. In contrast, a commercial airplane may take one and one-half to two years to manufacture once the order is placed