Essay About Main Issue And 2015Current Ratio2.53

Anandam Company Additional Funding
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Problem/IssueThe Anandam manufacturing company approached the local bank for additional funding to meet the growing requirements of his garment manufacturing company. The main issue recognized is whether to approve the loan by investigating their income statement and balance sheet.ObjectiveTo compare the ratios from the given to gather relevant information in order to decide whether or not the bank will approve the 50 million loan.Relevant FactsAnandam RatiosIndustry Average Ratios2012 – 20132013 – 20142014 – 20152014 – 2015Current Ratio2.53 : 11.79 : 11.60 : 12.30 : 1Quick Ratio (Acid Test Ratio)1.30 : 10.92 : 10.79 : 11.20 : 1Accounts Receivables6 times2.88 times3.42 times7 timesDebt to Equity Ratio47.06%46.89%64.50%35%Net Profit Ratio18.20%14%10.50%18%Inventory Turnover Ratio-3.11 times2.56 times4.85 timesReturn on Equity Ratio3.03%4.20%4.20%22%Days Sales Outstanding/ Receivables Collection Period60.83 days126.73 days106.45 days52 daysInterest Coverage Ratio9.66 times7.07 times4.52 times10 timesWorking Capital Turnover Ratio-5.422.218