ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them: Current Ratio 2019= 8.69 / 2018= 11.62 Acid Test Ratio 2019= 8.69 / 2018= 11.42 Times Interest Earned Ratio 2019= 72.97 / 2018= 124.74 Debt Ratio 2019= 11.52% / 2018= 8.65% Accounts Receivable Turnover 2019= 5.39 / 2018= 4.21 Inventory Turnover 2019= 0 / 2018= 130.58 Days Sales in Inventory 2019= 0 / 2018= 2 Average Collection Period 2019= 71 days / 2018= 86.79 days Based on the ratios calculated above, Can you conclude if any bank would easily give a loan to you?

ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them: Current Ratio 2019= 8.69 / 2018= 11.62 Acid Test Ratio 2019= 8.69 / 2018= 11.42 Times Interest Earned Ratio 2019= 72.97 / 2018= 124.74 Debt Ratio 2019= 11.52% / 2018= 8.65% Accounts Receivable Turnover 2019= 5.39 / 2018= 4.21 Inventory Turnover 2019= 0 / 2018= 130.58 Days Sales in Inventory 2019= 0 / 2018= 2 Average Collection Period 2019= 71 days / 2018= 86.79 days Based on the ratios calculated above, Can you conclude if any bank would easily give a loan to you?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them: Days Sales in Inventory Average Collection Period
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