1. (5 points) The inventory turnover ratio for a company is 8. The industry average is 14. Thoroughly interpret this situation. 2. (5 points) The price-to-earnings (P/E) ratio for a company is 18. The industry average is 11. Thoroughly interpret this situation. 3. (10 points) Given the following information, thoroughly address the financial health of this company. Company Industry 2022 2023 2023 Current ratio 0.71 0.59 1.20 Equity to asset ratio 0.30 0.20 0.80 Inventory turnover ratio 6.00 5.00 8.00 Total asset turnover ratio 1.12 1.25 1.50 Gross profit margin 16% 14% 17% Net profit margin 8% 3% 11% Total assets for the company decreased 10% from $400,000,000 in 2023. The industry realized a double-digit percent increase in sales over this period.

Answer rating: 100% (QA)

1 Interpretation of Inventory Turnover Ratio The inventory turnover ratio measures the efficiency with which a company manages its inventory A higher ratio indicates that the company is selling its in... View the full answer