Credit Analysis First, we focus on liquidity.

Liquidity ratios measure the ability of a firm to meet its short-term financial obligation. An important liquidity ratio is the current ratio that measures current assets to meet creditors demands or to pay its short-term obligations. From the above table, it appears that year 2010 current ratio was higher than year 2009, which year 2010 was about 1.91 times and year 2009 was 1.85 times so, we can know that in year 2010 ,they have more better ability to meet the short term obligations.Moreover, we can use quick ratio as well to look for better understand on the liquidity of short term, in year 2010 they have increase 0.04 times from year 2009,so this can assure that they can meet their short term obligations. For collection period, it measures the numbers of days that a firm requires to collect credit sales. According to the above ratio, in 2009 was 6.03 days and it decreased to 5.97 days in 2010.This show that the firm has better performance to collect their account receivable. Moreover, a firm had the decreasing days to sell inventories from 133.22days to 110.5 days. It means that a firm improve their period to sell inventory problem which may come from advertising and international channel to sell the products.

Profitability and Efficiency Analysis There are two ratio in efficiency ratios that are return on common equity and return on assets . It measures a firms profit in relation to the invested funds and it is important in assessing firms overall management and effectiveness. Firstly, return on assets measures the return on total investment. From the number in the table , year 2010 the firm could generate more percentage of return on assets than year 2009 which is 13.88 percent.Secondly, return on common equity that measures the rate of return earned on equity holders investment. As shown in the table, in 2010 return on equity was worse than in 2009 which are only 18.7 percent but in year 2009 is 19.27 percent, It means that in 2010 common stock holders got less returns than year2009. The profitability ratios are used to assess a businesss ability to generate earnings as compared to its expense and other relevant costs incurred during a specific period of times. From Gross profit margin of year 2010 that lower from year 2009 1.63 percent is 27.41 percent show that they have low ability to sell well of their cost of the production than last year. Operating profit margin is a firms overall operating effectiveness. Moreover, operating profit margin reflects both the cost of products and operating expenses as

well but in year 2010 the percentage is lower from the last year from 115.44 to 103.56 this may come from more investment in year 2010 lead it to have lower operating profit margin. In 2010, the firm could generate lower earnings before interest and taxes too in year 2010 that is only 12.41 percent. Net profit margin measures how much net profit can be generated from each $1 sales. From the above table, we saw that in 2010 could not generated net profit margin higher than year 2009 that are 9.86 and in 2010 are 8.83 so,This can show that the firm have lower performance to control cost of goods sold , operating expenses , interest expenses and taxes expenses worse than year 2009 or they are expanding that plant of production to generate more income in the future. Analysis Solvency Solvency refers to the ability of a firm to meet its long-term financial obligations., the debt to equity ratio of this firm decreased from 0.37 times to 0.33 times. It means that a firm tried to have low debt to make the shareholder trust the firm and gain more capital. Furthermore, long- term debt to equity that shows ability of a firm to pay long-term debt also dropped from 4.63% in 2009 to 1.21 % in 2010 as well. For time interest earned ratio which measures the ability to meet the interest payment by comparing the EBIT and divided it by interest. According to the above ratio, it increased from 28.35 times in 2009 to 58.23 times in 2010. It indicates that in 2010 a firm had higher ability to pay interest than in 2009.