Ratio Analysis Conduct trend analysis and industry/peer analysis for the relevant ratios and other important variables. Liquidity: current and quick ratios Leverage: Debt/Assets or Debt/Equity Profitability: profit margin, return on assets, return on equity Use DuPont decomposition to analyze the ROE ratio and illustrate the strengths and weaknesses of the firm.

NOTE: The trend analysis should cover at least three years. The ratios should be compared to industry average ratios or closely comparable firms (peers).