Star River Electronics Ltd. Case Analysis

angiotensin-converting enzyme River Electronics LTD. Case Analysis 1. When analyzing strengths and weakness of one firm, we prefer to involvement proportion supposed to help financial statement. Basically, these ratios fall into 6 categories to measure liquidity, assets management, leverage, coverage, profitability and added market value. Current ratio gain steadily from 0.76 in 1998 to 0.88 in 2010, showing admirer Rivers increased but hushed low ability to enforce its obligation on time. By contrast, excluding inventory, the libertine ratio was autumn from 0.41 to 0.34 in the quad years to illustrate that its ability to bear up its liability on time and quickly was still distressing and deteriorating. Meanwhile, the rules of thumb with respects to current ration and quick ratio were 2 and 1, which Star River was far below. Regarding to the efficiency of victimisation assets, Star River was also in the awful performance .Main assets were managed poorl y by continuous declined inventory turnover, total assets turnover, and receivable turnover. Meanwhile, immediate payment spiritual rebirth Cycle is another version to question underutilized management in operating working capital. The length mingled with payments by Star River with receiving money by others was doubling from 97 days to 250 days, decrease the efficiency of using free immediate payment flow.

When this company has to pull out money back aft(prenominal) 250 days, debt is one option here. Although in two years, assets addition pass judgment were bigger than sales growth rates, they are not enough . In the class of profitability, Star Rive! r also failed to prove its ability to list money to shareholders. Generally speaking, triplet main trends in ROS, ROE, run Margin, and ROA were decrease in the cardinal years, meaning slumping competency of creating profit, though from 2000 to 2001, there was a frail up in these four figures. In the coverage class, EBIT whole could pay interest expenditure twice, badly in 2000, decreasing to less than 2. If Star Rivers EBIT/interest ratio willing be constant, it is risky to...If you pauperism to get a full moon essay, order it on our website: BestEssayCheap.com

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