XYZ COMPANY. ISC Comparative Ratio Analysis Current Ratio 1996 1997 1.25 1993 Quick Ratio 1.20 Industry 1.30 Ace. Rec. Turnover .60 .55 .50 Inventory Turnover Acc. Pay Turnover 28 days 50 days 41 days 2.5 30.2 Debt to Worth 27 days 51 days 42 days 3.5 x 45.7 35 days 60 days 45 days Long Term Debt to Capitaliztion 2.8 x 40.2 Times Interest Earned Gross Profit Margin 12.20 X 21.0 3.5. 9.52 x 22.5 12.21 x 15.2 Net Profit Margin 4.2 % 2.5% Return on Assets 7.75 10.65 6.1% Return on Equity 63.8. 77.65 42.6 Dividend Payout 84.5 85.1. 27.2 Now that you have calculated the various ratios of XYZ Company, Inc., place them into the "Comparative Ratio Analysis" Chart above. Answer the following questions relative to XYZ Company, Inc. A. Liquidity 1. List all pertinent ratios that you should concentrate on from those listed above. Briefly comment on the trend of each liquidity ratio and compare 1 to the industry average (Place answer in a chart format on the ney Trend Industry Comparison 3. Comment on XYZ's overall Liquidity B. Debt Position and Interest Coverage 1. List all pertinent ratios you should concentrate on from those listed on the previous page. 2. Comment on the trend of each debt position and interest coverage ratio and compare it to the industry average. Industry Comparison Trend Ratio Comment 3. Comment on XYZ's overall debt position. Does the firm have the ability to take on much more additional debt? c. Profitability 1. List all pertinent ratios you should concentrate on listed on the previous page. 2. Comment on the trend of each profitability ratio and compare it to the industry average. Industry Trend Comparison Comment Ratio 3. Why is XYZ Company's ROE so much higher than the Industry Average 4. Comment on XYZ's overall profit picture. the firm's Dividend Policy). (Include a comment on