a.

b.
 Ratio Industry average,
Fox Manufacturing,
2015 2015
Current ratio 2.35 1.844
Quick ratio 0.87 0.750667
Inventory turnover 4.55 5.609756
Average collection period 35.8 days 17.59531
Total Asset turnover 1.09 1.469508
Debt ratio 30% 55%
Times interest earned 12.3 8
Gross profit margin 20% 23%
Operating profit margin 13.50% 13.33%
Net profit margin 9.10% 7.15%
Return on total assets 9.90% 10.51%
Return on common equity 17% 23%
Earnings per share 3.10 2.145

1) Liquidity
As we can see the company's liquidity position is worse than industry average as current and quick rations are less than indust
The company might not be able to cover its short-term obligations when they come due and cause loss of suppliers goodwill.

2) Activity
The company's ability to convert its assets into cash is higher than industry average, thus the company can use its assets bette
Inventory turnover rate is high, which may cause higher storage costs which results decreased OPM and NPM
As for average collection period, it is lower than competitors, which is good as the company can collect cash quickly and use it

3) Debt
The company's debt position is worse than the industry average.
The company finances its operatins with debt, thus it has higher degree of financial leverage and has more loans than competi
Its profit is volatile and in case of decrease in revenue, the company might not be able to meet its liabilities.
As a result times interest earned ratio is lower, which means that in case of reduction in income,
the company may have problems to cover its interest expenses.

4) Profitability
The company's GPM is higher than its competitors. This might be caused by higher sales prices or low COGS.
Operating profit is less than industry average, which indicates that the company has higher operational costs than its competit
As we can see, NPM is also lower than industry average, thus the company has higher operating and interest expenses
The company's ROA and ROE are higher than industry average, which means that company uses its assets better than its comp
but for ROE, as the company is financed with loans and its profit is volatile, for compensating this risk, the company's ROE is hi
If we look at earnings per share, the company's figure is less than industry average, thus it will be less attractive for investors,.
as Fox Manufacturing is not able to generate as good earnings per share as its competitors

The company needs to improve its liquidity ratios and reduce level of debts
In addition the company should work on reduction of operating costs as it gives lower OPM and NPM
ons are less than industry average.
s of suppliers goodwill.

can use its assets better than its competitors.

t cash quickly and use it in different activities

more loans than competitors.

l costs than its competitors

terest expenses
ets better than its competitors
the company's ROE is higher
attractive for investors,.