Question

Choose between GOOD, SATISFACTORY, POOR

How does TP Jarmon perfom compared to the industry average in each category?

	TPJ	Indutsry Average
Current Ratio	1.84	1.8
Quick Ratio	0.72	0.9
Asset Turnover	1.47	1.2
Fixed Asset Turnover	2.22	1.8
Avg Collection Period	20.1 Days	20 days
Inventroy Turnover	5.48	7
Debt Ratio	0.55	0.5
Times Interest Earned	8	10
Return on Sales (Net profit margin)	7.15%	5%
ROA	10.51%	6%
ROE	23.4%	12%

Answer 1

	TPJ	Industry Average	Comment	Remark
Current Ratio	1.84	1.8	Current ratio greater than 1 is considered to be good, since it is also slightly above industry average so it is good.	Good
Quick Ratio	0.72	0.9	Quick ratio of 1 is considered to be good on average and TPJ 0.72 is below the industry average so this is poor.	Poor
Asset Turnover	1.47	1.2	Asset turnover shows efficiency, it is higher than the industry but not very good so it can be said to be satisfactory.	satisfactory
Fixed Asset Turnover	2.22	1.8	This also shows efficiency, this ratio can be said good, higher than industry average.	Good
Avg Collection Period	20.1 Days	20 days	This ratio is similar to industry so we can say it is satisfactory. This shows how long the firm is taking to collect is receivable.	Satisfactory
Inventory Turnover	5.48	7	This turnover ratio is low and below the industry average so we can say this is poor performance.	poor
Debt Ratio	0.55	0.5	Debt ratio is very close to the industry average so we can say it is satisfactory.	satisfactory
Times Interest Earned	8	10	TIE shows the interest payment ability, it is closer to the industry average so we can say this is satisfactory	satisfactory
Return on Sales (Net profit margin)	7.2%	5.0%	Net profit margin is higher than the industry average so we can say this is good, higher profit margin is better.	Good
ROA	10.5%	6.0%	Return on asset is higher than the industry so we can say it is good performance comparative to the industry.	Good
ROE	23.4%	12.0%	Return on equity is twice the industry average so we can say it is good performance.	Good