Bigger Isn't Alway Better

incumbent balance: ( oc up-to-date Assets/Current Liabilities) 20002001200220032004 6.383.683.563.623.74 bustling Ratio: (Current Assets Inventory)/Current Liabilities 20002001200220032004 2.542.00.57.61.62 promptlyFixs liquidity position has weakened over the years. The Current proportionality measures the effectiveness of the company to repay neat marge debt with its short bourneinal figure assets. It stands out that in in 2001 Quickfixs flowing liabilities increased from $65,000 to $160,000 a 246% increased. The main close for the current liabilities increase was the short endpoint bank loans. as well as the current assets, especially the cash and marketable securities have slackd comfortably (by 88%). That huge increased in current liabilities and go down in current assets has caused the Current ratio to decrease from 6.38 to 3.68 a 57% decreased. From 2001 to 2004 the current ratio has stayed stable in the 3.68-3.74 range. The Quick ratio measures the effectiveness of the company to repay short marches debt with its short term assets excluding the inventory. Similarly to the current ratio, the quick ratio had a significantly decreased from year to year. In this instance the decrease was in 2002 from 2 to .57, roughly a 30% decreased. The clear reason for this decrease is the substantial increased in inventory in 2002 from $270,000 to $500,000. So, if Andre wants to assess the liquidity position of the stringent he will notice that either accounting or not accounting for inventory, the ratios will show the same rearing which is that the firm has lost the capacity to repay short term debt with short term assets, and therefore in a miscue of emergency the firm doesnt have enough assets to abet its liabilities in the short term. Asset enjoyment Ratios Asset workout ratio: (Revenue / tally Assets) 20002001200220032004 .94.83.78.891.05 Inventory Utilization ratio: (Inventory/ descend Assets) 200020012002200 32004 1.921.99...If you want to get a full ! essay, order it on our website: OrderCustomPaper.com

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