TMC Ltd, a large producer of telecommunications equipment, retails its products through suburban outlets. Shown below are the calculations of some of its key ratios for 2016 and 2015.

1. Comment on TMC's profitability, asset management, liquidity and financial structure.
2. Why could ROE and ROA move in different directions?
3. What caused the fall in ROA?
4. What caused the fall in asset turnover?
5. What caused the increase in the current ratio?

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Return on shareholders' equity Return on total assets (ROA) Profit margin Asset turnover Days in inventory Days in debtors Current ratio Quick ratio Debt-to-equity ratio 2016 13% 8% 20% 0.40 times 72 days 42 days 1.6 times 0.7 times 1.4 times 2015 12% 9% 18% 0.50 times 55 days 42 days 1.5 times 1.1 times 1.0 times