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Sandy has advised that Little Pear is seeking to meet the industry ratio targets, which are: Current Ratio 2:1 Liquid Ratio 1:1 Average Collection Period

Sandy has advised that Little Pear is seeking to meet the industry ratio targets, which are: Current Ratio 2:1 Liquid Ratio 1:1 Average Collection Period 40 days Inventory Holding Days 60 days Return on Equity 25% a. Comment on the efficiency as revealed by these results. b. Comment on the financial profitability as revealed by these results. c. Comment on the stability and liquidity as revealed by these results. d. Using the comparison to industry averages, evaluate the financial potential of the organisation. In your answer, explain what Little Pear could improve to its ability to meet its debts and future funding requirements

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a Efficiency Little Pears efficiency can be assessed based on its ability to manage its resources effectively The current ratio and liquid ratio indicate the companys ability to meet its shortterm obl... blur-text-image

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