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Strength and weakness

Liquidity Ratio The current ratio and quick ratio for both years 2010 and 2011 actually are inefficiency because they not attempt the good or efficiently ratio, 1:1 . on year 2010 is preferable because it indicates increased liquidity for this company . however on year 2011, this company, the ratio or the ability of the firm to pays its short term obligation 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. Profitability Net profit margin on year 2010 show that a higher ratios indicates the efficiency and effectiveness operation in firm compare by the year 2011. This company must to make something to improve their sales and to get more net profits or less their expenses compare by revenue. Gross profit margin on year 2010, show that the a lower ratios and inefficiency because the gross profit is less that caused by the amount of the cost of goods sold higher than year 2011. So, for the next year this company must to aware their sale and cost of goods sold to set better gross profit. Return on assets on year 2010 show that a higher ratios and efficiency ratios compare on year 2011. This case involved capital assets. Have many assets on 2011 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 was increase. This company must to less the reserves of equity to get more effective for the next year. Debt Management Ratio Debt 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 total liabilities must get the ratios of 30% above to show the company have a commitments of liability to pay interest. The interest earned ratio , the higher ratios is on year 2010, the lower ratios on year 2011. The ratios on year 2011 was decreased. So company must to pay many times to within one year to the creditors.

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Assets management ratio Inventory turnover , the total show that this company managing their assets to generates their sales was increased on year 2011. It also shows effiency in collecting debts. To hold of ordering and earning inventories to the lowest possible level. The total days shows that on year 2010 the company is to fast to settle their debts. However on year 2011 this company not attempt. So, for the next year they must to increase their sales with manage the assets. Non current assets on year 2010 was preferable because it shows the efficiency in colletion policy. However on year 2011 they are weak ratios. Non current assets must higher , but net income or sales must to improve also. Total assets turnover. This company again difficult to control their assets in order to generates sales. This very complicated. So, they must to ensure the inventories needed t sustain operations are avaible.

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