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Question 1 
There is an improvement in the current ratio, quick ratio and cash ratio of the company during 
2015 when compared to 2014. The liquidity trend indicates that the company has improved their 
liquidity position. The current ratio of the company is better than the industrial average while the 
quick ratio is weaker for the company when compared to the industrial average. Similarly, the 
cash ratio of the company is below average when compared to the industrial average. The 
business is liquid and is in a position to meet their financial obligations effectively even though 
they have poor ratio when compared to the industrial trend. There is an improvement in the cash 
balance indicating about the business focuses on improving their liquidity position and in 
efficiently managing their working capital requirement. Thus, the company has average liquidity 
and has improvement in their liquidity position.
Question 2 
The company does not efficiently use assets; there is decreasing trend in the efficiency ratios 
indicating about the decreasing asset utilization capacity of the business. There is a considerable 
decrease in the return on assets indicating that the assets employed are not generating profit as 
they not effectively managed or the assets are not capable of generating a higher return. There is 
decrease in the inventory turnover ratio, fixed asset turnover ratio and total asset turnover ratio 
indicating about the decreasing efficiency in the asset management of the company. Similarly, all 
these ratios are below than the industrial average indicating that other peers in the industry are 
having better utilization and management of their assets. There is an increase in accounts 
receivables collection period indicating about the delay in converting sales into cash. If this 
continues to increase it will add pressure to the liquidity position of the company. Thus, the 
company is not efficient in managing their assets.
Question 3 
The company has a significant proportion of debt in their capital. There is increase the total 
liabilities and long-term debt of the company, but at the same time, there is considerable increase 
the total equity of the company. There is a decrease in the proportion of debt to total assets of the 
company. The proportion of debt for the company is significantly higher when compared to the 
industrial average.

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