Fnt1

| Company G |

Memo

To: Chief Executive Officer

From:

CC:

Date: 1/7/2013

Re: Current Financial Status Analysis

Current Ratio: Measures a company’s ability to pay short-term obligations. A low current ratio is an indication that a company may not be able to cover its obligations in the short-term.

In year 11, Company G’s current ratio was 1.86. In year 12, Company G’s current ratio was 1.80. The year 12 information provided by the quartile industry data for home centers shows current ratios of 1.4, 2.1, and 3.1. When comparing the data from year 11, year 12, and the quartile industry data, the trend for Company G’s current ratio is decreasing. This decreasing trend is a sign of weakness. It is an indication that Company G would be less likely than other companies in the industry to be able to cover its obligations in the short-term.

Acid-Test Ratio: Measures a company’s ability to pay all of it current liabilities if they came due immediately. An acid-test ratio of less than 1.00 indicates that a company may not be able to pay off current liabilities if there were to become due immediately.

In year 11, Company G’s acid-test ratio was 0.43. In year 12, Company G’s acid-test ratio was 0.64. The year 12 information provided by the quartile industry data for home centers shows acid-test ratios of 0.6, 0.9 and 1.6. When comparing the data from year 11, year 12, and the quartile industry data, the trend for Company G’s acid-test ratio is decreasing. This decreasing trend is a sign of weakness. It is an indication that Company G would be less likely than other companies in the industry to be able to pay off the current liabilities if they became due immediately.

Inventory Turnover Ratio: Measures the number of times a company sells its average level of inventory during a year.

In year 11, Company G’s inventory turnover ratio was 6.1. In year 12, Company G’s inventory turnover ratio was 5.2. The year 12 information provided by the quartile...