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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 RECEIVABLE TURNOVER

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

RECEIVABLE TURNOVER (DAYS) 30 45

INVENTORY TURNOVER 3 TMIES 4 TIMES

PROFIT MARGIN 10% 7%

Discuss any potantial weakness that the ratio may reveal in the overall performance of the entity, and comment on the possible causes for these results.

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