Do an analysis of the companys short term activity ratios

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Reference no: EM131314829

The new owners of Popular Choice Bhd., have hired you to help diagnose and solve problems that the company has had in maintaining adequate liquidity.

As a first step, you perform a liquidity analysis. You then do an analysis of the company's short-term activity ratios. Your calculations and appropriate industry norms are listed.

Ratio

Organic Food

Industry Norm

Current ratio

4.5

4.0

Quick ratio

2.0

3.1

Inventory turnover

6.0

10.4

Average collection period

73 days

52 days

Average payment period

31 days

40 days

Reference no: EM131314829

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