1. Key West Productions Ratio Analysis Kevin Kokoszka

2. Ratios Division ADivision BDivision CConsolidated Current Ratio3.03253.56662.82613.1038 Quick Ratio1.83032.16451.73911.8887 Debt to Assets Ratio0.39250.22660.31700.3067 Return on Sales Ratio0.05330.07390.07500.0677 Return on Assets Ratio0.16130.20230.19640.1882 Return on Equity Ratio0.19080.18340.21570.1963 Avg Collection Period (in days)45.581440.537543.136443.0240 Avg Days of Inventory (in days)60.375958.140557.031358.5461 Best Values in Green, Worst Values in Red

3. Division Comparison

4. Division A Strengths: Return on Equity > Return on Assets (Successful use of financial leverage) Average Collection Period lower than Industry average Weaknesses: Lowest Returns on Sales & Assets Average Collection Period still worst of the 3 divisions Debt to Asset Ratio high compared to industry average

5. Division B Strengths: Highest Return on Assets Lowest Avg. Collection Period Weaknesses: Unsuccessful use of Financial Leverage (Return on Equity < Return on Assets) Worst Current and Quick Ratios (Poor Cash Management)

6. Division C Strengths: Successful use of Financial Leverage Highest Return on Sales & Equity Best Current and Quick Ratios Weaknesses: Current and Quick Ratios still too high

7. Analysis of Key West Productions Current and Quick Ratios are high Company may not be earning the highest possible return on its assets Not much higher than the industry average The Debt to Assets ratio is higher than the industry average May indicate Key West is a higher risk

8. Analysis of Key West Productions (cont.) Return on Sales lower than Industry Average Less profitable than competitors, may need to cut costs Return on Equity slightly higher than Return on Assets Successful use of financial leverage Industry averages show other companies tend to be better in this area

9. Analysis of Key West Productions (cont.) Average Collection Period less than Industry Average Company may be more successful in collecting Accounts Receivable May also have more restrictive credit terms, possibly costing sales Average Days of Inventory appears very high Could lead to higher storage costs May indicate that competitors have less problems selling products