Analysis of the Present Position of Jools Furniture Ltd.

Analysis of the Present Position of Jools Furniture Ltd. Essay example
Masters
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Finance & Accounting
Pages 4 (1004 words)
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Finance for Managers Name: Faisal al Hajri Student number: 1068926 Tutor: Mrs. Kay Smith  Word count: 4018 Question 1:- Analysis of The Present Position of Jools Furniture Ltd. The table below presents the calculations from the information provided in the case study about furniture business…

Introduction

Gitman(2005) in these words “A firm’s ability to satisfy its short term obligations as they come due”(p.58). It is one of the most important financial indicators of a firm. A firm which will not be able to satisfy its short term obligations will neither be able to satisfy its long term obligations/debts nor will be able to satisfy its stockholders. Time series analysis of Jool’s Product division shows unfavorable results, as out of five indicators four are showing negative results. Although current assets have increased in 2009 as compared to 2008 but increase in current liabilities is more as compared to current assets so division’s liquidity has decreased. Increase in inventory turnover shows that division is now more efficient in selling its inventory. While increase in debtor’s days shows that firm making more credit sales now and is inefficient in collecting its receivables and indicates that money is tied up in debtors. Decrease in creditor’s days shows that division’s credibility has decreased and its suppliers are allowing it less time to pay them back. ...
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