Examine the industry average ratios for the auto parts industry, and then compare them to Parts, Inc., a fictional company in that industry. Determine if the ratios for Parts, Inc. are favorable or unfavorable, and enter your answer in the table. Indicate the significance of your ratings for Parts, Inc. in terms of the implications of the financial condition for the company. Analyze your results and discuss the financial health of the company in terms of each rations as well as an overall assessment. Ratings column Favorable/unfavorable
| |
Average Ratios |
Parts, Inc. Ratios |
Rating |
| Liquidity Ratios |
|
|
|
| Current Ratio |
3:1 |
1.5:1 |
|
| Quick Ratio |
1.5:1 |
1:1 |
|
| |
|
|
|
| Asset Management Ratio |
|
|
|
| Inventory Turnover |
7 times |
5 times |
|
| |
|
|
|
| Debt Management Ratio |
|
|
|
| Debt to Equity |
1:2 |
1.5:2 |