Ajax Case

1.

| 2007 | 2006 | 2005 |

LIQUIDITY RATIOS | | | |

Quick Ratio | 1.09 | 2.2 | 1.6 |

Current Ratio | 1.35 | 2.95 | 2.05 |

LEVERAGE RATIOS | | | |

Total Debt to Net Worth | 1.18 | .43 | 1.19 |

Current Debt to Net Worth | 1.15 | .28 | .61 |

ACTIVITY RATIOS | | | |

Net Sales to Fixed Assets | 9.2 | 8.0 | 6.9 |

Net Sales to Inventory | 19.4 | 22 | 22 |

Collection Period | 73 | 22 | 35 |

PROFITABILITY RATIOS | | | |

Net Profits on Net Sales | -.02 | .075 | .095 |

Net Profit on Net Worth | -.1 | .36 | .61 |

2.

Ajax does not have any concerns with liquidity, currently. Since the Quick Ratios for 2005, 2006, and 2007 are 1.0 and above it is said that they are in liquid condition. Ajax was more liquid in 2006 since the ratio was the largest. In the year of 2007, Ajax was close to not being liquid.

3.

Ajax has had concerns with leverage in 2005 and 2007 because the company’s relationship has exceeded 100%. In the year of 2005, there was no concern with leverage due to the fact that the relationship was 43% which was less than 100% which indicates a concern with leverage.

Ajax began to pile up trouble in 2005 and 2007 because the relationship exceeded 80%.

4.

Ajax seems to be constantly increasing their fixed assets over the years instead of decreasing. The sales have not increased enough to continue to spent money on plant and equipment. The inventory turnover appears to be on track. Ajax has a large amount of accounts receivables for the year of 2007. Ajax should reduce the time for collecting accounts receivables. So yes, Ajax definitely has room for improvements with spending and collecting.

5.

Ajax has a major issue with the cost of Labor and Materials. The company is spending 50% or more of their sales on Labor and Materials. If Ajax continues to spend more on expenses than they are making, this business is sure to close in no time at all.