Debt to equity ratio, Current Ratio, Quick Ratio Return on Equity (ROE), Net Profit Margin?

Case Studies in Foren 158 Table 1 TechTennis-USA Inc. (SIC 3630) Comparative Income Statements for Years June 2014 to june 2011 June 2013 June 2012 June 2014 June 2011 128.234 76144 181123 67654 Sales 68.916 44360 93.546 39 793 Cost of Goods Sold 59.318 31.784 87577 27861 Gross Profit 42.600 20.105 64.285 19.210 Selling General & Administrative Expense 11.679 16.718 23.292 8.651 Operating Income Before 1.840 1.853 1388 1304 Depreciation, Depletion & Amortization 14.878 9.826 21.904 7347 Operating Profit 1.947 1584 3403 3.065 Interest Expense 0.000 0.000 0214 0.135 Non-Operating Income/Expense 0.000 0.000 0.000 -2.891 Special Items Pretax income 18715 13.294 7.896 1526 Total Income Taxes 3.807 7761 6.189 0.405 Income Before Extraordinary Items &Discontinued Operations 10.954 4.089 7105 1121 Extraordinary Items 0.000 0.000 0.000 0.000 Discontinued Operators 0.000 0.000 0.000 0.000 Net Income 10.954 1121 7105 4.089 Available for Common 10.954 1121 4.089 7105 Savings Due to Common Stock Equivalents 0.000 0.000 0.000 0.000 Adjusted Available for Common 10.954 1121 Earnings Per Share (Primary) Excluding Extra Items & Disc Op 4.089 7105 1.210 0.125 0.785 0.465 Earnings Per Share (Fully Diluted)- Including Extra Items & Disc Op 1210 0125 0.785 0.465 Dividends Per Share 0.000 0.000 0.000 0.000 Table 2 TechTennis-uSA Inc. (SIC 3630) Comparative Balance Sheets as of june 30, 2014 to 2011 (in million dollars, except EPS data) June 2014 June 2013 June 20005 ASSETS june 2011 0885 Cash&Equivalent 0514 0.063 51076 0.036 Receivables 27801 14.402 11719 39135 nventories 19.577 9.762 6325 0.000 Prepaid Expenses 0.000 0.000 0.000 3.015 1.449 Other Current Assets 0.708 0.475 94111 49.341 Total Current Assets 24.935 18.555 27884 19.736 Gross Plant, Property & Equip 19.523 18.486 6336 4.948 Accumulated Depreciation 3.140 1.304 21.548 14.788 16.383 Net Plant, Property & Equip 17182 2.481 1112 1.884 Other Assets 1,776 118.140 65.241 43.202 37513 TOTAL ASSETS LIABILITIES 1.250 0.900 0.000 1.400 Long Term Debt Due in One Year 2.707 0.000 0.000 3.732 Notes Payable 15.072 7.344 4.724 13.288 Accounts Payable 1.554 1.145 2.619 3.782 Taxes Payable 3.091 3.127 5.468 4710 Accrued Expenses 14.092 14.732 24.059 23.030 Total Current Liabilities 19.800 14.800 19.841 62.057 Long Term Debt 0.118 0.685 1.254 Deferred Taxes 1.881 EQUITY 0.001 0.001 Common Stock 0.001 0.001 1.473 Capital Surplus 8.010 8.018 8.023 2.221 Retained Eaned 5.210 12.315 23.395 0.192 Less Treasury Stock 0.236 0.247 0.247 Common Equity 3.503 12.985 20.087 31.172 TOTAL EQUITY 3.503 12.985 20.087 31.172 TOTAL LIABILITIES&EQUITY 37513 43.202 118.140 65.241 QUESTIONS Review the financial information in the attachedTables 1 and 2. Explain why you may or may not be concerned? Performa complement of procedures to gather analytical evidence of risk. These procedures should include trends for all assets, liabilities, sales, cost of goods sold, gross margin, and total operating expenses, in addition to select ratio analysis. Though you have a comparative income statement and balance sheet, common size statements and comparisons to industry averages may be useful. Does the quantitative evidence indicate accounts or account groups that have expectantly changed the three years? Do these initial results justify "specific past two or further investigation? over that point