Question

1. You have been hired as an analyst for an advisory company and your team is working on an independent assessment of G-Aviation. G-Aviation is a firm that specializes in the production of aviation material. Your assistant has provided you with the following data for G-Aviation and their industry.

Ratio	2019	2018	2017	2019- Industry Average
Long-term debt	0.45	0.40	0.35	0.35
Inventory Turnover	62.65	42.42	32.25	53.25
Depreciation/Total Assets	0.25	0.014	0.018	0.015
Days’ sales in receivables	113	98	94	130.25
Debt to Equity	0.75	0.85	0.90	0.88
Profit Margin	0.082	0.07	0.06	0.075
Total Asset Turnover	0.54	0.65	0.70	0.40
Quick Ratio	1.028	1.03	1.029	1.031
Current Ratio	1.33	1.21	1.15	1.25
Times Interest Earned	0.9	4.375	4.45	4.65
Equity Multiplier	1.75	1.85	1.90	1.88

Your team was asked to provide the CEO with an assessment of the firm's solvency and leverage. Be as complete as possible given the above information, but please do not use any irrelevant information.

*Please help me put it in spreadsheet form

Answer 1

Particulars	2019	2018	2017	Industry Average 2019	Conclusion	Comments
Long-term debt	0.45	0.4	0.35	0.35	Unfavourable	long term debt should be lower the better
Inventory Turnover	62.65	42.42	32.25	53.25	Favourable	Inventory turnover should be higher the better
Depreciation/Total Assets	0.25	0.014	0.018	0.015	UnFavourable	Depreciation is an expense
Days’ sales in receivables	113	98	94	130.25	Favourable	Better working capital managament because of less credit period
Debt to Equity	0.75	0.85	0.9	0.88	Favourable	Debt equity ratio should be lower the better
Profit Margin	0.082	0.07	0.06	0.075	Favourable	Profit margin should be higher the better
Total Asset Turnover	0.54	0.65	0.7	0.4	Favourable	Asset turnover ratio should be higher the better
Quick Ratio	1.028	1.03	1.029	1.031	UnFavourable	Quick ratio should be higher the better
Current Ratio	1.33	1.21	1.15	1.25	Favourable	Current ratio should be higher the better
Times Interest Earned	0.9	4.375	4.45	4.65	UnFavourable	Times interest earned should be higher the better
Equity Multiplier	1.75	1.85	1.9	1.88	UnFavourable	Equity multiplier should be higher the better