Dear Mr. Stewart
INSUFFICIENT RATIOS
The Current Ratio for 2004 is insufficient, at about 1.1:1, it is just under what is acceptable. You need to increase your current assets or decrease your current liabilities. Your business could end up in bankruptcy if your debts come due. The current ratio for 2005 is worse yet, at 0.9:1, your business is hurting if your debts come due. Recomendation is to decrease liabilities. Your Accounts Recievable Turnover Ratio for 2004 is insuficient, as well for 2005 which is at 2.2. My recomendation is to improve your debt collection system. Your Net Profit Ratio for 2004 is a mere 6% and could be higher if you decrease your expenses. Your Net Profit Ratio for 2005 is a -25% which is highly insufficient. Your expenses need to decrease greatly or your business will be run aground. That is my advice for you.
INSUFFICIENT RATIOS
The Current Ratio for 2004 is insufficient, at about 1.1:1, it is just under what is acceptable. You need to increase your current assets or decrease your current liabilities. Your business could end up in bankruptcy if your debts come due. The current ratio for 2005 is worse yet, at 0.9:1, your business is hurting if your debts come due. Recomendation is to decrease liabilities. Your Accounts Recievable Turnover Ratio for 2004 is insuficient, as well for 2005 which is at 2.2. My recomendation is to improve your debt collection system. Your Net Profit Ratio for 2004 is a mere 6% and could be higher if you decrease your expenses. Your Net Profit Ratio for 2005 is a -25% which is highly insufficient. Your expenses need to decrease greatly or your business will be run aground. That is my advice for you.
Sincerely,
Carter Farrier
