Identify the trouble spots that the ratio analysis suggests


The below table provides a partial Ratio Analysis of Jim’s Appliance Shop. Identify the trouble spots that the ratio analysis suggests and provide some insights on how these trouble spots can be corrected (give some specific suggestions).

Ratio                            Jim’s Appliance Shop                Industry Average

Current Ratio                           1.70                                         1.88                   

Debt Ratio                                0.70:1                                      0.73:1             

Debt to Net Worth Ratio           2.70:1                                      2.60:1  

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Financial Management: Identify the trouble spots that the ratio analysis suggests
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