Give the comments and suggestions of the following ratios: (10 marks)
2019 2020
1) Current Ratio 2.99:1 2.88:1
2) Quick Ratio 2.96:1 2.83:1
3) Debt to Equity Ratio 0.01:1 0.06:1
4) Total Assets to Debt Ratio 100.03:1 22.59:1
5) Proprietary Ratio 0.79:1 0.77:1
Dear Student,
Here is your answer,
1. As current ratio of the company has fallen therefore it means that the liquidity position of the company has been fallen down.
2. Quick ratio is more conservative hen the current ratio it also signifies that the liquidity position has gone down.
3.Debt to Equity ratio signifies the relative proportion of shareholders' equity and debt used to finance a company's assets. in both years he company has financed its assets through equity more.
4.Total asses to deb ratio signifies the proportion of asset financed through debt, the company has reduced the Debt in current year.
5. This ratio shows the proportion of total assets of a company which are financed by proprietors' funds, company has reduced little bit less proportion of equity on Total assets.
Regards.
Here is your answer,
1. As current ratio of the company has fallen therefore it means that the liquidity position of the company has been fallen down.
2. Quick ratio is more conservative hen the current ratio it also signifies that the liquidity position has gone down.
3.Debt to Equity ratio signifies the relative proportion of shareholders' equity and debt used to finance a company's assets. in both years he company has financed its assets through equity more.
4.Total asses to deb ratio signifies the proportion of asset financed through debt, the company has reduced the Debt in current year.
5. This ratio shows the proportion of total assets of a company which are financed by proprietors' funds, company has reduced little bit less proportion of equity on Total assets.
Regards.