Briefly comment on how DDP Pty Ltd is performing in each ratio. Use your ratio calculations from the previous question to interpret the results and explain your comments.

Ratio		Express as	Answer:
1) Return on Assets	Profit before tax + Interest Average Total Assets	x%	Average Total Assets Calculation: = (475,200+458,100) / 2 = 933,300/2 = 466,650 deturn on Assets = (75,440+18,720) / 466,650 = 94,160/466650 = 0.20177 = 20.18%
2) Return on Equity	Profit after tax Average Owners Equity	x%	Average Owner's Equity Calculation: = (298,200+270,900)/2 = 569,100/2 = 284,550 Return On Equity = 52,544 / 284,550 = 0.18465 = 18.46%
3) Quick Ratio	Current Assets Inventory Current Liabilities	x:1	Quick Ratio = (Current Assets - Inventory) / Current Liabilities Current Asset = Cash + Accounts Receivab1e + Inventory Current Liabilities = Accounts Payable Hence Quick Ratio = ( 30,000+49,200) / 57,000 = 79,200/57,000 = 1.3894 Quick Ratio = 1.38 : 1
4) Debt Ratio	Total Liabilities Total Assets	x%	Debt Ratio = Total Liabilities / Total Assets Hence Debt ratio = 177,000 / 475,200 = 0.3724 = 37.24%