1 page This assignment is based on the problem in the pdf file. The solution for part a and b are given. Use the results given to answer the following question: Based on the analytical procedures calculated in parts a and b, summarize your observations about Pinnacle’s business, including your assessment of the client’s business risk. Be sure to include the industry information from b) in your analysis. Note: this question is asking for your overall assessment of the business risk of Pinnacle. A) Account Percent change (’10-­-’11) Percent change (’09-­-’10) Net Sales 1.45% 2.70% COGS 2.85% 4.18% Net Income 16.50% (39.54)% Net Receivables 51.30% 8.61% Total Current Liabilities 41.28% 13.65% B) Ratio 2011 2010 2009 Cash Ratio 0.25 0.34 0.43 Current Ratio 1.75 1.93 2.19 A/R Turnover* 13.92 17.95 18.23 Inventory Turnover* 3.78 4.18 4.04 Debt-­-to-­-Equity 0.40 0.38 0.38 Gross Profit Percent 0.28 0.28 0.30 Profit Margin 0.80% 0.70% 1.19% Return on Assets* *indicates a ratio that requires an average; the values for the beginning of ’09 were not provided, so only the December ‘09 values were used in the calculations Ratio Pinnacle (Dec 31, 2011) Industry (Oct 4, 2013) Price/Earnings 11.57 16.70 Profit Margin 0.80% 9.00% Price to Book 0.12 0.23 Return on Equity 0.02 0.16