Mr Kong was hired as the analyst manager of MyBank. He and his team are conducting an independent evaluation of YTG Ltd. YTG Ltd. is a company specializing in the production of imported medical products from China. Mr Kong’s assistant provided the following data for YTG Ltd. and its industry.

Ratio	2015	2016	2017	2018	Industry Average (2018)
Long-term debt	0.34	0.35	0.4	0.45	0.35
Inventory Turnover	31.29	32.25	42.42	62.65	53.25
Depreciation/Total Assets	0.01	0.018	0.014	0.25	0.015
Days’ sales in receivables	90	94	98	113	130.25
Debt to Equity	0.94	0.9	0.85	0.75	0.88
Profit Margin	0.053	0.06	0.07	0.082	0.075
Total Asset Turnover	0.79	0.7	0.65	0.54	0.40
Quick Ratio	1.021	1.029	1.03	1.028	1.031
Current Ratio	1.11	1.15	1.21	1.33	1.25
Times Interest Earned	4.219	4.45	4.375	0.9	4.65
Equity Multiplier	1.85	1.9	1.85	1.75	1.88

REQUIRED:

a. The CEO of YTG Ltd. wrote in the annual report to shareholders: “In terms of our ability to fulfil short-term debt, 2018 is a good year for the company. We have high liquidity, mainly due to the high liquidity. High assets (cash, accounts receivable and short-term securities) have increased.” Is the CEO, right? Interpret and use relevant information in Mr Kong analysis. 

b. What is your opinion on the company's asset management? Provide the above information as completely as possible, but do not use any irrelevant information. 

c. You need to provide shareholders with an assessment of the company’s solvency and leverage. Provide the above information as completely as possible, but do not use any irrelevant information.

Answer rating: 100% (QA)

a The current and quick ratios can be used to determine a companys liquidity condition While the cur... View the full answer