You are Senior Analyst at Ajax Inc., a manufacturer of construction equipment, which is considering the purchase of one of its suppliers, Zitron Industries. The purchase has been given serious consideration by Ajax's board of directors,and several discussions have taken place between the management of both companies.

Zitronhas submitted financial data for the pastthreeyears. Your boss, Ajax's Controller, has asked you to analyze Zitron's financial statements and you have prepared the following ratios comparing Zitron's three-yearperformance along with the current year's ratios for your company, Ajax, as well as the industry averages

202020192018Averages2020

Zitron.Ajax|Industry

A.Inventory Turnover3.2X3.5X3.6X3.4X|4.0X

B.Average sale period - Days114Dys104Dys101Dys106Dys |91Dys

C.Accounts Receivable Turnover6.987.257.837.78|8.11

D.Average Daily Sales inAR52.350.3446.646.9|45.0

E.CurrentRatio1.651.951.702.30|1.95

F.Times Interest Earned3.873.463.283.56|3.50

G.Debt/EquityRatio0.500.460.400.45|0.50

H.SalesGrowth/(Decline)2.5%1.5%(1.5%)|4.5%| 5.6%|

I.Margin6.05.95.66.06.5

J.Turnover [T/O]5.35.65.95.6|6.0

In order to complete your report you must interpret your findings and make rec-ommendations on how this information will be useful to the management of the company.

Required:

Complete the following report on the answer sheet:

Usethe letters above to identify the various groups of ratios and provide comments on how Ajax and Zitron are performing in each category as opposed to how the industry is performing -An example has been doneto start the analysis.

AjaxManufacturing Inc.

Reporton Ajax Inc vs Zitron vs Industry

[ List the ratios by letter]

20202020

Zitron:202020192018AjaxIndustry

Example:Profitability/Growth

I.SalesGrowth/(Decline)2.5%1.5%(1.5%)| 4.5%|5.6%|