Usetrend analysis.Trends to determine the company's financial condition and operating results to investors whether favorable trend forecasting company's future development. This analysis method is a kind of dynamic analysis, which is based on the difference between the analysis and ratio analysis based on the law, while effectively compensate for its shortcomings

1. Using the financial information provided above, please complete the chart below for the most current year of data Type Ratio Liquidity Current Ratio current assets / current liabilities 5,190,499/2,712,49=1.914 1.5 & UP Quick Ratio (current assets - inventories) / current liabilities (5,190,49941,674)/2,712,494=1.898 1.00 & UP Net Working Capital Current Assets Current Liabilities 5,190,4992,712,494=2,478,005 Debt Ratio Total Liabilities/Total Assets 13,341,109/22,361,691=0.597 .50 & DOWN Debt to Equity Ratio Total Liabilities / Shareholders' Equity 13,341,109/7,213,586=1.85 1.00 & DOWN Return on Assets Net Income/ Total Assets 3,588,071/22,361,691=0.16 5% Return on Equity Net Income/Shareholde r's Equity 3,588,071/7,213,586=0.497 15% Debt (Please note that total debt is current portion of long term debt + long term debt) Profitability Formula Calculation Benchmar k 2. For the ratios with benchmarking data provided, identify the significance of the calculated value compared to the benchmark value (i.e. is The Pebbles, Inc.performing better or worse than industry). Has The Pebbles, Inc.improved over the prior year? Answer: Liquidity Ratio: Here liquidity ratio consists of current ratio and the quick ratio. If we look at the current ratio we can find that: Current ratio: The current ratio for Pebbles is 1.914 whereas the industry average is 1.5. This means that Pebbles liquidity position is strong as compared to industry average and it has enough liquidity available to repay its current liability. Quick Ratio: The quick ratio for Pebbles is 1.898 whereas the industry average is 1.00. This means that the company is capable of repaying its immediate debt without liquidating its inventory. The company is strong as compared to industry average. Debt Ratio: The debt ratio consists of debt ratio and debt to equity ratio. If we look at these ratios for Pebbles we can find that: Debt Ratio: The debt ratio of Pebbles is 0.597 whereas industry average is 0.5. This indicate that Here we can see that more than half of asset is financed through debt and the company has high risk of bankruptcy as compared to industry average of that indicates towards only 50% of finance through debt. Debt to equity ratio: The debt to equity ratio for Pebbles is 1.85 whereas the industry average is 1.0. This indicates that the debt is higher than the equity therefore the risk of bankruptcy is higher for the company as compared to other players in Industry with average 1.0 debt equity ratio. Profitability Ratio: Profitability ratio includes the return on asset and the return on equity. If we look at these ratios for Pebbles we can find that: Return on Asset: Return on asset for Pebbles is 16% whereas the industry average is 5%. This indicates that the company is utilizing its assets more efficiently as compared to other players in the industry. Return on equity: Return on equity for Pebbles is 49.7% whereas industry average is 15%. This indicates that the company is giving extremely high return to its shareholders as compared to other players in the industry. Overall we can say that the company has improved far better in the Industry as compared to other players. The only area of concern is the high portion of debt in financing by the company