Question
) In analysing the financial statements of an entity, the following ratios were calculated: 2011 2012 Current ratio 2:1 1.3:1 Quick ratio 1:1 0.7:1 Receivables
) In analysing the financial statements of an entity, the following ratios were calculated:
|
| 2011 | 2012 |
| Current ratio | 2:1 | 1.3:1 |
| Quick ratio | 1:1 | 0.7:1 |
| Receivables turnover (days) | 30 | 45 |
| Inventory turnover | 3 times | 4 times |
| Profit margin | 10% | 7% |
Discuss any potential weaknesses that these ratios may reveal in the overall performance of the entity, and comment on possible causes for these results
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Measuring ROI In Learning And Development Case Studies From Global Organizations
Authors: Patricia Pulliam Phillips, Jack J. Phillips
1st Edition
1562867997, 9781562867997
