This indicates that this business has slightly worse ability to meet its immediate debts within the near future. We can see from the chart this is a favorable result. CUFF The CUFF has decreased from 12. 38 times to 0. 17 times from 2011 to 2012. This indicates that this business is less able to cover its average current liabilities or its horn term debts.
We can know from the table this is an unfavorable result. Efficiency Debtors Turnover Ratio (DOT) days days Creditors Turnover Ratio (COT) days Stock Turnover Ratio (STOP) days days STOP In 2011, it took average 60 days for the business to sell their stock to customers,but in 2012 it was 67 days. The STOP increased slightly from 201 Tit 2012. This represents an dreads of the STAR. This meaner that the business is selling its stock slower. Without further detail of the type of stock that is sold by Tuscan Foods we cannot know whether this is satisfactory or unsatisfactory.
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DOT In 2011 it took on average 98 days for the business for the debtors to settle their accounts with business but in 2012 it was 95 days. The DOT was slightly decreased from 2011 to 2012. Conclusion need to more efficient to its collection from debtors If they do so they can solve its liquidity problem. It has to contact debtors as soon as their payments are due. To improve its collection from debtors, it could then pay the creditors on time. It could also increase advertising to increase Cash sales which would increase net cash from operating activities.