1. Prepare a report that presents ALL your computations and discussions in Part 2. The report should be ORGANIZED AND easy to follow (i.e., put your computation in labeled tables like Exhibit A of this document).
2. Prepare a letter to accompany the report. The LETTER should NOT go into detail about formulas and how amounts were determined. Instead, the letter should immediately (in the first paragraph) state the purpose of the analysis and your RECOMMENDATION. The paragraphs to follow should discuss HOW and WHY you make the recommendation. Most importantly, your letter MUST reference the report throughout. Be sure to mention in the first paragraph that you have attached a detailed report on which your recommendation is based.

INFORMATION/COMPUTATIONS

inventory turnover ratio

	company 1	company 2
2017	111.9/13.754=8.1	29,963/4,864 = 6.16
2018	139.4/16.61=8.4	32,275/5,209 = 6.2
2019	165.5/18.835=8.8	32,918/5,409 = 6.09

Receivables Turnover

	company 1	company 2
2017	15.04	29.95
2018	14.33	40.18
2019	13.69	42.25

Acid test ratio-Quick ratio

	company 1	company 2
2017	30.986B+6.4B/ 57.883=0.6	10,616/7,122 = 1.49
2018	41.25B+12.6B/68.391=0.8	9,829/7,817 = 1.26
2019	55.021+16.8/87.812=0.8	8,870/7,315 = 1.21

Current ratio

	company 1	company 2
2017	131,310/45,718=2.87:1	1.5
2018	162,648/50,708=3.21:1	1.3
2019	225,248/75,376=2.99:1	1.2

free cash flow

	comapny 1	company 2
2017	18,365-(-11,955)= 30,320	2,557-580 = 1,977
2018	30,723-(-13,427)= 44,150	2,141-668 = 1,473
2019	38,514-(-16,861)=55,375	2,408-819 = 1,589

debt to total assets ratio

	company 1	company 2
2017	45,718/131,310= 35%	7,826/13,856 = 56.5%
2018	50,708/162,648= 31%	8,626/13,059 = 66.1%
2019	75,376/225,248= 33%	8,263/12,901 = 64%

Return on common stockholders' equity ratio

	company 1	company 2
2017	3,033/23.497=12.9%	1,228/4,709 = 26%
2018	10,073/35.629=28.3%	1,000/3,612 = 27.7%
2019	11,588/52.804=21.9%	1,464/3,306 = 44.3%

ROA

	company 1	company 2
2017	3,033/131,310= 2.31%	1207/13856 = 8.71%
2018	10,073/162,648= 6.19%	999/13059 = 7.65%
2019	11,588/225,248= 5.15%	1464/12901 = 11.35%

asset turnover ratio

	company 1	company 2
2017	NS=177,866 TA= 131,310 , ATR= 1.35	13856=TA TR=39403,,, 2.84
2018	NS=232,887 TA=162,648 ATR= 1.43	TA= 13,059 TR=42,151,, 3.22
2019	NS=280,522 TA= 225,248 ATR= 1.25	TA=12,901 TR=42,879,, 3.32

profit margin formula

	company 1	company 2
2017	company 1 reported net losses instead of gaining revenue for the profit margin on all accounts.	1228/39,409 3.15%
2018		1000/42,151 = 2.37%
2019		1464/42,879 = 3.41%