A lending officer is provided with the following Table 1 about the financial ratio of a business borrower XYZ Ltd.XYZ Ltd. is a paper producer and has a policy of giving 30 days' credit. What do these tell us about the efficiency management of XYZ Ltd?

Table 1. Financial Ratios of XYZ Ltd.

2018

2019

2020

Current Ratio

1.5

1.4

1.2

Quick Ratio

0.9

0.8

0.8

Inventory Turnover Ratio

2

2.2

1.78

Creditor Turnover(days)

37

39

64

Debtor Turnover(days)

73

74

86

Gross profit

27%

24%

22%

Net Profit

7%

6%

6%

Gearing ratio

8%

7%

7%