You are a financial consultant who has been retained to analyze the company's performance and find out what's going wrong. The following additional information is provided with the financial statements. Depreciation for 20X7, 20X8, and 20X9 was $200, $250, and $275 million respectively. No stock was sold or repurchased, and like many fast growing companies, Prospec paid no dividends. Assume the tax rate is a flat 34% and the firm pays 10% interest on its debt.

Calculate the indicated ratios for all three years:

Current ratio, quick ratio, accounts receivable days, inventory turnover, fixed asset turnover, total asset turnover, debt ratio, debt equity, TIE, ROS, ROA, ROE, equity multiplier

Analyze trends in each ratio and compare each with the industry average

	20X7	20X8	20X8
Sales	$1,578	$2,106	$3,265
COGS	631	906	1,502
Gross Margin	$ 947	$1,200	$1,763
Expenses
Marketing	$316	$495	$882
R & D	158	211	327
Admin.	126	179	294
Total Expenses	$ 600	$ 885	$1,503
EBIT	$347	$315	$260
Interest	63	95	143
EBT	$284	$220	$117
Tax	97	75	40
EAT	$187	$145	$ 77

	20X7	20X8	20X9
ASSETS
Cash	$ 30	$ 40	$ 62
Accounts Receivable	175	351	590
Inventory	90	151	300
Current Assets	$ 295	$ 542	$ 952
Fixed Assets
Gross	$1,565	$2,373	$2,718
Accum. Depreciation	(610)	(860)	(1,135)
Net	$ 955	$1,513	$1,583
Total Assets	$1,250	$2,055	$2,535
LIABILITIES
Accounts Payable	$56	$81	$134
Accruals	15	20	30
Current Liabilities	$71	$101	$164
Capital
Long-Term Debt	$630	$1,260	$1,600
Equity	549	694	771
Total Liability & Equity	$1,250	$2,055	$2,535