Upload
bijoy-salahuddin
View
22
Download
0
Embed Size (px)
DESCRIPTION
Ratio Analysis of “Square Textiles Limited”
Citation preview
Ratio Analysis of Square Textiles Limited
Current Ratio:A liquidity ratio that measures a companys ability to pay its short term obligations. It is calculated by dividing current assets by current liabilities.The Current Ratio formula is:
Computation:
In 2007
Current Ratio = 1.34
In 2008
Current Ratio = 1.26
Quick Ratio:An indicator of a companys short-term liquidity. This quick ratio measures a companys ability to meet its short term obligations with its most liquid assets.
The Quick Ratio Formula is:
In 2007
Quick Ratio = 0.55
In 2008
Quick Ratio = 0.64
Receivables Turnover:An accounting measure used to quantify a firms effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets.The Receivables turnover formula is:
Receivables Turnover =0.61 timesAverage days sales uncollected:
Inventory TurnoverMeasure of relative size of inventoryThe Inventory Turnover Formula is:
In 2008
Inventory turnover = 3 times
Average Days Inventory on hand:The Average Days Inventory on hand Formula is:
In 2008Average Days Inventory on hand = 121.6 or 122 days