Group one

1. EMERALD AMISSAH 10108425 16. FOSU EMMANUEL EFFAH 10105607

2. FRANK ESSIBU ANNAN 10106294 17. AGYEMANG GERTRUDE SERWAH
3. QUANSAH REBECCA ARMATSO 10105813
10105976 18. BRIGHT LETSAH 10107531
4. GAWU COMFORT. 10109338 19. CAESAR JESSICA OGBOO 10107607
5. AFFARE KOJO 10107524 20. ADAMTEY CLEMENT KWASHIE 10107782
6. QUANSAH ABIGAIL 10107887 21. NII-FIO JUSTINE ANTWI 10108113
7. KOKROKO PRINCE YAO 10108461 22. SEMEGLO HARRISON KOKUO 10107698
8. ASAMANI HILDA NYAMEWAA 23. GRACE OWUSU 10093583
10108462 24. LARYEA JESSICA NAA ADJELEY- 10106456
9. VINCENT MENSAH 10096949 25. AGBLEKPE ELIZABETH 10106455
10. IBRAHIM ADAMS 10093913 26. ASANTE ABIGAIL 10106438
11. SULLEY AMANDA 10107696 27. HILDA AYIKPA 10106435
12. ABEBU BLESS 10107977 28. Nartey Israel Claassen 10108066
13. EWURAKUA CONDUAH 10107527 29. OPPONG EDITH 10106007
14. ISSIFU NASIR 10107606
15. WAGBA CHERYLLA 10105273
 QUESTION 1
Gallery of Dreams
Ratios
Ratio Industry 2015 2014 2013

Current 2.50x 4.48x 4.06x 3.48x

Quick 0.80x 1.47x 1.18x 0.96x

Average collection period 11 days 16 days 15 days 9 days

Inventory turnover 2.30x 1.19x 1.24x 1.37x

Days payable outstanding 15 days 11 days 12 days 8 days

Fixed asset turnover 17.50x 9.74x 9.09x 8.85x

Total asset turnover 2.80x 1.50x 1.67x 1.82x

Debt ratio 62.00% 29.47% 34.04% 39.17%

Long term debt to        

total capitalization 25.53% 14.09% 18.91% 22.33%

Times interest 9.93x 22.02x 19.00x 14.23x

earned

Fixed charge 8.69x 4.59x 4.47x 4.25x

coverage
Gross profit margin 31.10% 59.21% 59.39% 58.52%

Operating profit 8.06% 22.05% 21.86% 20.52%

margin

Net profit margin 4.32% 11.89% 11.00% 10.97%

Return on 9.21% 17.97% 18.28% 18.35%

investment

Return on equity 11.34% 24.14% 27.51% 29.88%

 SOLUTION
Strengths: 
• Current and quick ratios are above industry
average and increasing
 
• Accounts payable are paid in a timely manner

• Overall debt has declined significantly and is well

below the industry average
• Interest is covered by profits as are lease payments and the
number of times covered has increased each year
 
• Profitability is excellent with gross, operating and net profit
margins above industry average and increasing all years with the
exception of gross profit margin which decreased slightly in 2015
 Weaknesses: 
• The average collection period is increasing and is
now above industry average

• Inventory turnover is below industry average and

is extremely low indicating the firm does not
move inventory well

• Fixed asset turnover, while increasing, is still

below industry average
• Total asset turnover is decreasing which implies sales are declining
and/or investments in assets are too high relative to sales

• Fixed charge coverage is below industry average and implies that

the firm has significant operating leases
 
• Return on investment is declining due to significant investment in
assets
 
• Return on equity is declining, but this is also positive as it is
partially due to the significant decline in debt.