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Strength and Weakness

Strength and Weakness

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Published by Zai Didi

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Published by: Zai Didi on Jan 13, 2013
Copyright:Attribution Non-commercial


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Strength and weakness
Liquidity RatioThe current ratio and quick ratio for both years 2010 and 2011 actually areinefficiency because they not attempt the good or efficiently ratio, 1:1 . on year 2010is preferable because it indicates increased liquidity for this company . however onyear 2011, this company, the ratio or the ability of the firm to pays its short termobligation was decreased . for the next year , this company must to balanced their current assets with current liabilities related by less the inventory to get best ratios.ProfitabilityNet profit margin on year 2010 show that a higher ratios indicates theefficiency and effectiveness operation in firm compare by the year 2011. Thiscompany must to make something to improve their sales and to get more net profitsor less their expenses compare by revenue.Gross profit margin on year 2010, show that the a lower ratios and inefficiencybecause the gross profit is less that caused by the amount of the cost of goods soldhigher than year 2011. So, for the next year this company must to aware their saleand cost of goods sold to set better gross profit.Return on assets on year 2010 show that a higher ratios and efficiency ratioscompare on year 2011. This case involved capital assets. Have many assets on2011 but get less net income. From year to year this company must to improve their net income or less their assets of firm.Return on equity on year 2010 show that ratios are higher than year 2011.This ratio relation on net income and total equity. On year 2011 the equity wasincrease. This company must to less the reserves of equity to get more effective for the next year.Debt Management RatioDebt ratio, the higher ratios is on year 2010. The lower ratios on year 2011.The ratios on year 2011 was decreased . suppose be the total assets and totalliabilities must get the ratios of 30% above to show the company have acommitments of liability to pay interest.The interest earned ratio , the higher ratios is on year 2010, the lower ratioson year 2011. The ratios on year 2011 was decreased. So company must to paymany times to within one year to the creditors.

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