Give comments and Recommendations for these Ratio Analysis

Ratio analysis Activity ratio Inventory tumover = sales revenue/inventory 2020 Sales 2019 592,253,460 238,485,223 338.429,710 257,436,197 Inventory Inventory turnover 2019 592,253,460/238,485,223 2.48 times 2020 338.429,710/257,436,197 1.31 times Interpret: Inventory tumover had dropped in 2020. but however in 2019 the company was bounced in inventory tumover. Average collection period = accounts receivable average sales per day Accounts receivable Sales 2020 643,956,556 338.429,710 2019 434,968,398 592.253,460 Average collection period 2020 2019 643,956,556/338,429,710/365 695 days 434,968,398/592,253,460/365 268 days Interpret: In 2020 it took 695 days, which is not a good sign in current year. But in 2019 company took only 268 days to collect collection. Average payment period = accounts payable average purchase per day (70% of cost of good sold/365) 2020 2019 Accounts payable COGS 70% of COGS 436,265,023 338.429,710 236900797 550,713,032 592,253,460 414577422 Average payment period 2020 436,265,023/236900797/365 550,713,032/414577422/365 672 days 484 days 2019 Interpret: compare with average collection and average payment period in 2020 took less days to pay. But if average collection period is less than average payment period, that's the good sign for business, but unfortunately in 2020 company can't able to collect early. But 2019 company's average collection period is less than average payment period, which was good. Efficiency ratio Total assets tumover = sales total assets x 100% Sales Total assets 2020 338,429,710 466.923,934 2019 592,253,460 671,314.947 Total assets tumover 2020 (338.429,710/466,923,934) x 100 (592,253,460/671,314,947) x100 72% 88% 2019 Interpret: The company has been efficiently managed its assets in 2019, but in current year significant rise of efficiency has been fall more than 11% Debt ratio = (total liabilities total assets) x 100 (for getting total liability we redact total equity) Total liabilities Total assets 2020 465,918,417 466.923,934 2019 424,144,857 671.314.947 Debt ratio 2020 99% (465,918,417/466,923,934) x 100 (424,144,857/671,314,947) x 100 2019 63% Interpret: 99% of the assets are financed by debt in 2020 and 63% of the assets are financed by debt in 2019. Time interest eamed ratio = earning before interest and taxes/ interest expense EBIT Interest expense 2020 40,474,875 5.689.698 2019 5,395,056 3.794.811 Time interest eamed ratio 2020 2019 40,474,875/5,689,698 5,395,056/3,794,811 7.1 1.4 Interpret: in recent years 2020 company ability to meet its interest payment from it's annual eaming was 7.1 which increase sharply from 2019 to 1.4