You are provided this information about a retail store called "BoardSports:" BoardSports Industry Mean
Current Ratio 1.5 : 1 2: 1
Quick Ratio .75 : 1 1 : 1
Debt Ratio 0.87 : 1 0.75 : 1
Average Collection Ratio 46 days 33 days
Net Profit on Sales Ratio 5.5% 8.2%
Net Profit to Equity Ratio 7.7% 13.2%
What can you reasonably assess about the current financial status of this company?
A)The company is in excellent financial condition with no changes required.
B)The company is in respectable financial condition with no changes required.
C)The company is in questionable financial condition with minor changes required.
D)The company is in poor financial condition with significant changes required.

Question

Quizplus · Accepted Answer

BoardSports has a weaker financial position compared to the industry averages, with lower liquidity ratios, higher debt ratio, slower collection period, and lower profitability ratios. These indicate potential financial difficulties and the need for significant changes.

You Are Provided This Information About a Retail Store Called