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Analyze the short-term liquidity and operating efficiency

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Reference no: EM132494688

Question 1: Using the ratios and information given below for Chatty Communications Company, analyze the short-term liquidity and operating efficiency of the firm.

                                                                           2019                             2018

Current ratio                                            .30                           .40

Quick ratio                                               .25                            .37

Cash flow liquidity ratio                              .42                            .98

Average collection period                            31 days                31 days

Days inventory held                                      10 days               12 days

Days payable outstanding                             121 days              163 days

Cash conversion cycle                                  (80 days)              (120 days)

Fixed asset turnover                                    .20 times                  .19 times

Total asset turnover                                      .20 times                 .18 times

Cash flow from operations (in millions)               $587                         $1,142

Net sales (in millions)                                      $7,231                        $6,542

Reference no: EM132494688

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