Work for Level 3 Yr 1

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D2 – Assessment the economic efficiency and place of BB for 2014 using rate research (suitable ratio)

Introduction
In this task, I am required to assess the economic efficiency and position of BB for 2014 using rate research that is an appropriate for the panel of administrators of BB. I will be looking at BB enterprise and the competitors figure using industry average. Name of Ratio | Type of Ratio | BB enterprise | Competitor | Industry Average | Gross Profit Margin | Profitability | 43% | 62.25% | 54% | Net Profit Margin | Profitability | 30% | 20% | 25% | ROCE | Profitability | 58% | 30% | 36% | Current Ratio | Liquidity | 2.5:1 | 2.8:1 | 2.5:1 | Acid Test | Liquidity | 1.58:1 | 1.2:1 | 2:1 | Stock Turnover
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This implies that for every £2.50p possessed in present resources is due £1 in present responsibility. However, looking at the competitor’s determine of BB, the numbers recommend that the present rate is 2.8:1. This implies that for every £2.80 possessed in present resources is due £1 in present responsibility.
Comparison to BB and BB’s competitor’s, you can state that BB has great present rate and is fluid as the market regular is 2.5:1. The figure 2.5:1 is generally considered acceptable, as firm would cover these demands from present resources. However BB competitor have higher present resources, as it is 2.8:1. This implies that they are more assets to fulfill brief – phrase financial obligations.

Quick ratio
Looking at the numbers for BB, the numbers recommend that fast rate is 1.58:1. This implies that for every £1 the company owes in short- terms debts, it only has £1.58p in assets resources (current resources not including stocks). However, looking at the competitor’s determine of BB, the numbers recommend that the fast rate is 2.1:1. This implies that for every £1 the company owes in brief –term debts, it only has £2.10 in assets resources.
Comparison to BB and BB’s competitor’s, you can state that BB has high quick ratio as the market regular is 2:1. This implies that BB is able to fulfill the temporary
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