1. Key West Productions Ratio Analysis Steve Santora 18 April 2003 DIT 1006

2. Strengths and Weaknesses of Division A Current RatioQuick Ratio Debt to Asset Ratio Return on Sales (Profit Margin) Return on Assets Return on Equity Average Collection Period (Days) Average Days of Inventory Division A3.031.830.3930.0530.1610.1914660 Current ratio- This division has poor cash management because it does not earn much return on its assets. It is above the industry average. Quick Ratio- This division is unable to pay its debt well. This ratio is below the industry average but is still the worst in the company. Debt to Asset Ratio- This division is very risky. It is well above the industry average. Return on Sales- This division has poor profitability. It is well below the industry average. Return on Assets- This division has the lowest return on assets in the company and is not even close to the industry average. This division is performing poorly. Return on Equity- This division performs well above the industry average in this category. It successfully leverages its debt. Average Collection Period- This division collects its AR in less time than the industry average. However, it is the worst within the company. Average Days of Inventory- This division is almost three times higher than the industry average. Therefore, it is having poor sales. It is also the worst within the company. Division A

3. Strengths and Weaknesses of Division B Current ratio- Division B has poor cash management. It is well above the industry average and is the highest in the company. Quick Ratio- Division B is better than the industry average but is still the worst in the company. Debt to Asset Ratio- This division assumes the lowest amount of risk in the company and is slightly below the industry average. Return on Sales- This division has decent profitability as it is about one percent lower than the industry average. Return on Assets- This division’s return on assets is just about half of the industry average and therefore is doing poorly. Return on Equity- This division leverages its debt well compared to the industry average but is still the worst in the company. Average Collection Period- This division does a great job of collecting money from its customers because it is well below the industry average. Average Days of Inventory- This division is having difficulty with sales because this ratio is about double that of the industry average. Current Ratio Quick Ratio Debt to Asset Ratio Return on Sales (Profit Margin) Return on Assets Return on Equity Average Collection Period (Days) Average Days of Inventory Division B3.572.160.2270.0740.2020.1834158 Division B

4. Strengths and Weaknesses of Division C Current ratio- Division C has a poor return on its current assets and therefore has poor cash management. Its ratio is above the industry average and average within the company. Quick Ratio- Division C is capable of paying its debt, however it is below the industry average. This ratio is about average within the company. Debt to Asset Ratio- Division C assumes a higher risk than the industry average but is average within the company. Return on Sales- Division C has a semi low profitability in comparison to the industry average. In terms of the company, Division C is average. Return on Assets- This division is not performing well with its resources when compared to the industry average. However, it is average within the company. Return on Equity- Division C leverages its debt well in terms of the industry average. However, it is average within the company. Average Collection Period- This division does a good job of collecting money from its customers. It collects the money faster than the industry average but it is average within the company. Average Days of Inventory- Division C sales are low due to this ratio being high. It is about double the industry average. However, it is average within the company. Current Ratio Quick Ratio Debt to Asset Ratio Return on Sales (Profit Margin) Return on Assets Return on Equity Average Collection Period (Days) Average Days of Inventory Division C3.261.970.3010.0640.1840.1864359 Division C Division C and the company as a whole have the exact same ratios. Therefore the above analysis is true for both Division C and the entire company.

5. Key West Productions Ratios Current Ratio Quick Ratio Debt to Asset Ratio Return on Sales (Profit Margin) Return on Assets Return on Equity Average Collection Period (Days) Average Days of Inventory Division A3.031.830.3930.0530.1610.1914660 Division B3.572.160.2270.0740.2020.1834158 Division C3.261.970.3010.0640.1840.1864359 Consolidated3.261.970.3010.0640.1840.1864359

6. Key West Productions