Dear Mr. Sir
You asked me to comment on the health of your business. So first of all let me give you numbers.
Current Ratio: 05- 1.3:1, 04-1.34:1
Accounts Receivable Turn over Ratio: 05- 2.2%, 04-1.6%
Net Profit Ratio: 05-(-25.15), 04-5.54
Your Current Ratio's are adequate for both 05 and o4, but if the ratios get any higher I would recommend that you put some of your money into working captial. The Accounts Receivable Turn Over Ratio are both sufficient for 05 and 04 but dont let it get below 1.5% or you might not be able to cover current liabilty. As for your Net Profit Ratio 04 was a pretty good year but but 05 was very bad. I would recomend cutting all expenses possiable to try to make up for it.
You asked me to comment on the health of your business. So first of all let me give you numbers.
Current Ratio: 05- 1.3:1, 04-1.34:1
Accounts Receivable Turn over Ratio: 05- 2.2%, 04-1.6%
Net Profit Ratio: 05-(-25.15), 04-5.54
Your Current Ratio's are adequate for both 05 and o4, but if the ratios get any higher I would recommend that you put some of your money into working captial. The Accounts Receivable Turn Over Ratio are both sufficient for 05 and 04 but dont let it get below 1.5% or you might not be able to cover current liabilty. As for your Net Profit Ratio 04 was a pretty good year but but 05 was very bad. I would recomend cutting all expenses possiable to try to make up for it.
Sincrely,
Laramie Baker
