Fundamental Accounting Principles
Accounting Based on Ratio Analysis
Published by: https://expertassignmenthelp.com/
Filename: 1SAMPLE16C210-Fundamental-Accounting-Principles.PDF
For more assistance visit: https://expertassignmenthelp.com/finance-and -accounting-assignment-help/
Uploaded: April 30, 2016
Enjoy
Abstract
Relate to the company management in which areas they are performing well and in which
areas they need improvement.
Based on above ratio analysis, AC Speed seems to follow an aggressive sales plan, wherein
majority sales are on Credit. While this has boosted Current Assets (Accounts Receivable)
and also Revenue, this strategy needs careful credit analysis and recovery. Credit sales may
lead to the problem of bad debt which may ultimately lead to loss and bad financial
performance. So management needs to look at Receivables cycle and Collectibles.
The company needs to work on improving profit margins going ahead.
Solvency ratio is one area where a company is performing well and it must continue to do so.
Probably the company is debt averse, which explains good Debt to Assets ratio.
Top Related