That is not the case with Tire City, as the company has only 19% of its capital structure in long-term debt and its debt/equity ratio is 0.39. Solvency is important because I need to know that in the short-term, the company can make its payments. Tire City has over $1 million in cash, has a strong current ratio and a low level of current maturities ($125,000).

Given that the current financial position is strong, the third thing I want to know is that the company is expected to maintain a strong financial position going forward. For this I note that sales are increasing, the net profit margin is stable, and the expansion of the business in terms of assets, retained earnings, sales and profits has been stable over the past five years, it appears that the company is positioned to continue with this growth over the coming years as well....
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