I have this so far for my

Financial Analysis

CanGo stands inedible to a beneficial advantage financially. CanGo ensures prepared a business situation of not taking on more debt than they can hold. CanGo furthermore has very good current and quick ratios, with a current ratio of 5.39 and a quick ratio of 4.53 it is pretty clear that CanGo could effortlessly pay of their debt if necessity and static proficient to retain operation. CanGo has a working capital of 164,520,000 on once again these demonstrations that CanGo is further than capable of repaying off its debts. When looking at CanGos horizontal of solvency they seem to be doing very well in this area as well with a current debt ratio is 67.3% According to the Risk Management Association the average debt ratio for most companies is 62%, given that CanGo is at just over 60% should they need financing for a project banks will consider them as low risk and be more likely to give lower interest rates (Harrison, 2008).

Further liquidity ratios regarding inventory and receivables does not look as good. CanGo with its Current inventory turnover ratios of only 0.23 requirements think through creating approximately modifications to its inventory strategy to acceleration this percentage. This statistic weakness direct up a red flag to an investor or financing company as to their capability to unload their products. CanGo is a new establishment nevertheless this number may just be low basically for the reason that they are so new. Commonly a low inventory turnover ratio indicated one of two things, either they are having troubles selling their products which would also be notable in other ratios or they are keeping way to much stock on hand. Keeping too much stock on hand means paying unnecessary storage and warehousing costs. Given that CanGo has a high sales revenues of 50,000,000 reported on its income statement it is likely that because they are a new company they are simple just overstocked and need to find a good balance of how much inventory they really need to keep on hand (CanGo, 2002).

Financial Strategic Recommendations

Readily available are many strategies CanGo can use to expand its receivable turnover ratio; provided that rebates or incentives for purchasers who remuneration their balances off immediately, impressive fees on those who take more than a specified amount of time, and lowering or even eliminating interest on accounts that are paid in a specified period of time. All of these strategies will inspire buyers to pay their debt as soon as possible. It is important for any company to collect on its receivables quickly because the longer a receivable goes unpaid the more likely it is that it will be defaulted on. CanGo needs to do a complete inventory analysis, they need to determine what is in stock, how much of each item they have, how many of each item is being sold, and how often they are selling each item. They then need to determine how many of each item should be held in stock and how often they should do re-orders. The purpose is to be to keep as little stock on hand as possible without creating stock outs. This will increase CanGos inventory turnover ratio and save them avoidable storage and warehouse expenses.

Please correct me if I am wrong.