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You are asked to assess the financial performance of Pike Company and have been given the following information for 2016 to 2018. 2016 2017 2018

You are asked to assess the financial performance of Pike Company and have been given the following information for 2016 to 2018.

2016

2017

2018

Current Ratio

1.80

2.20

1.40

Quick Ratio

1.20

2.00

.80

Debt Ratio

.80

.70

.90

Debt to Equity Ratio

4.00

1.80

8.00

Inventory Turnover

38

40

45

Average Number of Days Receivables

10

20

45

Return on Equity

14%

30%

35%

Return on Assets

10%

20%

15%

1.How liquid is the business?

2.What is their debt structure? Mostly equity or debt?

3.Are they efficient in their operations?

4.What does profitability look like for the business?

5.Are there any red flags?

6.Is the business sustainable?

7.Where can the business improve?

8.Where are their strengths and weaknesses?

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