Question

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Using three years’ of ratios and information about Delta company, describe in a 2-3 page paper whether your company’s performance or position has improved over the three-year period or has grown worse. Your explanation should refer to the patterns in the ratios as well as to changes in the financial statement items that are part of the ratio. Your analysis will draw from the ratios, the financial statements, management’s discussion in the annual report and other sources as needed to help explain what you observe in the ratios.

Delta
Account receivable turnover	2015	2016	2017
Account receivable	2020	2064	2377
Sales	40704	39639	41244
Sales/account receivable	20.15	19.20	17.35
Average collection period
debtors/sales*365	18.11	19.01	21.04
Current ratio
Current assets	9056	7451	7844
Current liabilities	17526	15239	18573
Current ratio= CA/CL	0.52	0.49	0.42
Debt to equity ratio
Debt(Current liabilities + non current liabilities)	42284	38974	39382
Equity	10850	12287	13910
Debt/Equity	3.90	3.17	2.83
Inventory turnover
Inventory	379	519	916
COGS	6544	5133	5733
COGS/Inventory	17.27	9.89	6.26
Average inventory days Outstanding
Inventory/COGS*365	21.14	36.91	58.32
Return on assets in %
Net income	4526	4373	3577
Total assets	53134	51261	53292
Net income/total assets	8.52	8.53	6.71
Return on equity in %
Net income	4526	4373	3577
Equity	10850	12287	13910
Net income/equity*100	41.71	35.59	25.72
Return on Investments: (Investment revenue-Investment cost)/Investment Cost	26.2	22.63	15.40
Return on net operating assets in %
Net income	4526	4373	3577
Fixed assets+net working capital	14569	16587	15834
Net income/FA +net working capital	31.07	26.36	22.59
Profit margin in %
Net income	4526	4373	3577
Sales	40704	39639	41244
Net income/sales	11.12	11.03	8.67
Asset turnover
Total assets	53134	51261	53292
Sales	40704	39639	41244
Sales/Total assets	0.77	0.77	0.77

Answer 1