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Recent data for certain financial ratios for Tiffany are given below, along with the average ratios for its industry. Based on those ratios, answer the following. Each question is meant be answered in a few sentences but your answer must specifically address the question asked.

Answer these questions about Tiffany's funding preferences

i) What percent of its assets are funded with debt?

ii) What percent of its assets are funded with equity?

iii) Based on Tiffany's preference to fund its assets with debt or equity, how does its financial risk compare to its industry? Explain in a sentence or two.

A supplier to Tiffany sells merchandise to Tiffany and asks to be paid within 60 days. While any of Tiffany's financial ratios might be of interest to the supplier, which of the ratios listed below do you think would likely be the most important one to the supplier interested in being paid within 60 days? Why?

Which of the ratios presented suggest that, compared to its industry, Tiffany may do a good job of controlling its operating expenses? How can you tell? Your answer should name the ratio and clearly indicate that you understand why the ratio that you chose answers this question. Make reference to specific ratio data in your answer.

Here is the data for Tiffany and its industry.

Financial Ratios Tiffany Industry

Current ratio 5.1 3.6

Quick ratio 1.3 1.4

Inventory turnover 0.7 X 1.2 X

Operating profit margin 19.4% 5.0%

Debt ratio 21.8% 27.0%

Return on equity 17.3% 16.0%

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