Question

Apple Inc. liquidity ratios as recorded in September, 2018 have been recorded as being lower than...

Apple Inc. liquidity ratios as recorded in September, 2018 have been recorded as being lower than the liquidity ratios recorded in September, 2017.

Discuss the importance & implications of liquidity ratios in strategic finance management.

In your opinion, how can a company achieve higher liquidity ratios?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Liquidity ratio is one of the most important ratio in financial management. The importance of this ratio are as follows:-

a) This ratio tells us about the liquidity of the company i.e. do the company have enough money to pay off its current liabilities.

b) It also indicates whether the company has sufficient working capital for smooth day to day functioning.

C) A good liquidity ratio attracts investors who wants to invest for short term in the company. This inturn helps to improve the funds available to the company for investment.

A company can achieve higher liquidity ratio in following ways:-

1) Dispose of useless assets

2) Switch from short term loans to long term loans

3) Decrease your overhead expense and,

4) Increase the duration of your payment cycle.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The executive vice president of the company observed that the operating income for September was much...
The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. The manager is threatening to withhold year-end bonuses unless an explanation is presented. As the company’s management accountant, you have been asked to provide explanations for the disappointing September results. How can the data be presented to show that the managers did control the costs that were controllable?
For questions 8-13, reference the ratios below: SunBeam Manufacturing Electronics Industry 2019 2018 2017 2019 2018...
For questions 8-13, reference the ratios below: SunBeam Manufacturing Electronics Industry 2019 2018 2017 2019 2018 2017 Current Ratio 1.8 1.7 1.5 1.5 1.2 1.0 Accounts Rec. Turnover 13.0 12.1 10.0 11.0 12.0 10.0 # Days’ Sales in Receivables 28.1 30.2 36.5 33.2 30.4 36.5 Inventory Turnover 9.9 8.9 7.2 9.9 9.8 9.8 # Days’ Sales in Inventory 36.9 41.0 50.7 36.9 37.2 37.2 _____8. SunBeam’s current ratio (liquidity) is: Stronger over time Getting weaker over time Higher than its...
Asset management ratios are used to measure how effectively a firm manages its assets, by relating...
Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following case: Walker Telecommunications has...
SHORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc....
SHORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc. have taken enough time to discuss capital budgeting, dividend policy, and capital structure and now want to focus their attention on short-term finance and cash planning of the company. The board is considering the ways to improve the working capital management of the company. They are also discussing various sources of short-term financing and the minimum amount of money to borrow in the short-term...
Inventory Turnover and days’ sales in inventory Kracker Corp., Foodstuff, Inc., and Winston Stores, Inc. are...
Inventory Turnover and days’ sales in inventory Kracker Corp., Foodstuff, Inc., and Winston Stores, Inc. are three grocery chains in the United States. Inventory management is an important aspect of the grocery retail business. Recent balance sheets for these three companies indicated the following merchandise inventory (in millions) information: Kracker Corp. Foodstuff Inc. Winston Stores Cost of merchandise sold $32,850.0 $34,675.0 $35,040.0 Inventory, beginning of year 1,908.9 2,131.8 1,582.1 Inventory, end of year 1,871.1 2,048.2 1,489.9 a. & b. Determine...
Too Much Inventory BlackBerry Ltd. faced a rough week in late September 2013. Within a seven-day...
Too Much Inventory BlackBerry Ltd. faced a rough week in late September 2013. Within a seven-day period, the company not only announced a potential buyer for the company but also reported a quarterly loss of close to a billion dollars. The loss was generated primarily by write-down of BlackBerry 10 handsets (BB 10), the company’s new flagship product. Prior to this result, the company had been struggling to keep up with other smartphone competitors, and sales of the new phone...
Area 4: Management Please answer the following questions in a succinct and concise manner. Each answer...
Area 4: Management Please answer the following questions in a succinct and concise manner. Each answer should yield about 3-5 sentences. How would you explain the difference between Transactional and transformational leaders? Describe the major functions of Managers. Define SWOT analysis and explain how to apply it in a business situation or setting. Area 5: Management Information Systems Please answer the following questions in a succinct and concise manner. Each answer should yield about 3-5 sentences. What are the two...
By 1997, Como had achieved partial success in implementing project management. Lead times were reduced by...
By 1997, Como had achieved partial success in implementing project management. Lead times were reduced by 10 percent rather than the target of 25 to 35 percent. Internal resources were reduced by only 5 percent. The reduction in prototype time and cost was 15 percent rather than the expected 30 to 35 percent. Como’s automotive customers were not pleased with the slow progress and relatively immature performance of the company’s’ project management system. Change was taking place, but not fast...
By 1997, Como had achieved partial success in implementing project management. Lead times were reduced by...
By 1997, Como had achieved partial success in implementing project management. Lead times were reduced by 10 percent rather than the target of 25 to 35 percent. Internal resources were reduced by only 5 percent. The reduction in prototype time and cost was 15 percent rather than the expected 30 to 35 percent. Como’s automotive customers were not pleased with the slow progress and relatively immature performance of the company’s’ project management system. Change was taking place, but not fast...
For this assignment, imagine you have been contacted by an agency in your community to provide...
For this assignment, imagine you have been contacted by an agency in your community to provide consultation on how they might improve their services to clients. The agency is concerned that clients with serious counseling issues are "falling between the cracks" when they are referred to others in the community for intensive treatment. Furthermore, the brief aftercare they provide is not accessible enough to sufficiently support clients as they re-integrate into the community.           Chemically dependent persons with recurring mental...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT