TWE Enterprises Limited (a golf course operation) has been in business for a number of years now. In an effort to see how the company is doing, Tigger Weeds has asked for your help in interpreting some financial statement ratios. Tigger has been able to calculate the ratios, but is unclear on how to interpret them. Tigger's objective is to identify strengths as well as weaknesses in the company's financial position, and its overall ability to generate profits and cash flow. A summary of Tigger's ratio calculations appears below: Ratio Current Ratio Quick Ratio Inventory Turnover Days Sales Uncollected Accounts Payable Turnover Debt Ratio Times Interest Earned Gross Margin Ratio Profit Margin Ratio TWE Enterprises Limited Current Year Prior Year 1.85 2.10 0.92 1.05 9.89 13.14 45 29 12.9 11.4 55% 49% 2.49 4.95 42% 39% 9% 5% 7. Is income sufficient to support the interest payments on debt financing? How has this ratio changed relative to last year? (Has it improved? Or gotten worse?) Explain how these ratios relate to risk. (Hint: You may wish to tie in your analysis of the profitability ratios in this section to assess TWE's ability to make interest & debt repayments). [4 marks]