Appendix Two (Benchmarking studies) Objective: To conduct ratio analysis of a comparable company (Waterioo Corporation) and compare with that of the industry. Methodology: - Based on the above information the consulting group will conduct ratio analysis for the following ratios: Current ratio Recelvable's turnover Times's interest earned Profit margin Days in inventory Return on assets Cash current debt coverage ratio - As a next step the group will compare the ratios calculated above with industry benchmarks. The benchmarks are indicated within brackets besides each ratio. - Current ratio (3 to 1 ) - Receivable's turnover ( 13 times) o Times's interest earned (9 times) - Profit margin (10\%) - Days in inventory (60 dnss) - Return on assets (12\%) - Cash current debt coverage ratio (2 times)