Question
What happens to a seasonal business for example like winter products as the manufacturer buy a lot of materials to build winter products and inventory
What happens to a seasonal business for example like winter products as the manufacturer buy a lot of materials to build winter products and inventory is high during the summer and falls season, and there are not enough sales or any cash left as they will be busy building products for the winter, so the current ratio may show a low turnover, liquidity, and current ratio data during summer and fall, then the ratio picks up high around the winter seasons business picks up.
Is it an effective method to evaluate seasonal business using current ratio 2:1, liquidity or turnover ratios?
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