We have a firm whose ITO and ATO are 11 and 10 respectively and rising, while the industry's are 4 and 3. Liquidity ratios are comparable to the industry.  Net profit margin and gross profit margin are 1% and 2% respectively and slightly rising. The two profitability measures for the industry are 12% and 21% respectively.  Additionally, D/E and D/TA are 60/ 40 and 60/100 respectively, while the equivalent ratios for the industry are 25/75 and 25/100. The times interest and the fixed payment coverage ratios are 3 and 2 while for the industry they are 7 and 5. The average collection and the average payment periods are equivalent to the industry. Expound on this situation.

1) Give your thoughts on the performance of this firm.  If the firm is doing well (badly), why is it doing well (badly).

2) What suggestions would you make, if any?