A Report On Capital Goods Industry

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1- Introduction: 1-1- Background: Capital goods industry is consisting of products that have value for particular industries like mining, energy, infrastructure or constructions in large scale. They can directly improve the production process and create additional revenue through additional commercialisation and application in further industrial sectors. As a result of considerable market expanding, the capital goods sector is including suppliers varying in size and scope. In fact, they all play a crucial role in the production process of any firm or industrial activity. However, the development of the capital goods sector and the dynamism of the suppliers depend mainly on domestic demand factors such as the price of capital goods, price…show more content…
On the other hand, REL - established in 2001- specialises in the supply of complete pumping and dewatering systems, power generation, air compressors and associated equipment to the following industry sectors: Mining, Oil & Gas, Heavy Engineering and Infrastructure. As a publicly listed Australian company (ASX: RQL, with an annual revenue of $ 87.9 Million, employing around 293 employee has resources, both financial and technical, and the required equipment and personnel to carry out projects of any scale and complexity. REL has delivered successful outcomes on a diverse range of Australian and International projects (REL 2014). Financial analysts usually have viewed the liquidity ratios like current ratio and quick ratio as key indicators of a firm 's liquidity performance. But, they fail to distinguish that the fundamental liquidity protection against unanticipated discrepancies in the amount and timing of operating cash inflows and outflows is provided by a firm 's cash reserve investments in conjunction with its unused borrowing capacity rather than by total current asset coverage of outstanding current liabilities. A concentration of current assets in the fewer liquid receivables and inventory forms possibly will generate an increasing current ratio reflecting a worsening capability by the firm to cover its current liabilities rather than an enhanced liquidity position for the firm (Richards & Laughlin,1980). Ruback (2003) in his study showed that Dell and
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