CASE STUDY
You have been hired as an analyst for Mellon Bank and your team is working on an
independent assessment of Daffy Duck Food Inc. (DDF Inc.) DDF Inc. is a firm that
specializes in the production of freshly imported farm products from France. Your
assistant has provided you with the following data for Flipper Inc and their industry.
Ratio
2019
2018
2017
2019–
Industry
Average
Long–term debt
0.45
0.40
0.35
0.35
Inventory Turnover
62.65
42.42
32.25
53.25
Depreciation/Total Assets
0.25
0.014
0.018
0.015
Days’ sales in receivables
113
98
94
130.25
Debt to Equity
0.75
0.85
0.90
0.88
Profit Margin
0.082
0.07
0.06
0.075
Total Asset Turnover
0.54
0.65
0.70
0.40
Quick Ratio
1.028
1.03
1.029
1.031
Current Ratio
1.33
1.21
1.15
1.25
Times Interest Earned
0.9
4.375
4.45
4.65
Equity Multiplier
1.75
1.85
1.90
1.88
