Analyze all the ratios in detail

2019 2020 (a) Liquidity Position is shown by : (1) Current Ratio = Current Assets/Current Liabilities For 2019 = 78/157 = .4968 For 2020 = 93/170 = .5470 (2) Quick Ratio = Quick Assets/Current Liabilities For 2019 = 72/157 = .4585 1 For 2020 = 87/170 = .5117 2 3 4. (b) Profitability is shown by 5 Net Profit Margin = Net Profit/Sales* 100 6 Return on assets=Net Income/Total assets 100 7 Return on Equity - Net Income/Shareholders Equity 8 (c) Debt to assets ratio = Total debt/ Total assets 9 Debt to assets ratio not fallen as shown in calculation 10 (d) creditor days = paybles365/Cost of goods sold 11 Comment: Creditors payment period is very high. Company should try to reduce it. Inventory Turnover ratio = Cost of goods sold/Average Inventory 12 Comment: Inventory turnover has increased in 2020 as compared to year2019. (55-25)/55*100 = 54.54% 30/492*100 = 6.09% 30/275*100 = 10.90% (75-38)/75*100 = 49.33% 37/515*100 = 7.18% 37/107*100 = 34.57% 217/492 = .4410 300/515 = .5825 122/25*365 = 1781.2days 135/38*365 = 1296.7days 25/6 = 4.166 times 38/6 = 6.33times