Quick Ratio, Fixed Assets, Current Ratio Changes at SVF
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Scenario: Jeff, Bob and I stopped by the old 'watering hole' for an attitude adjustment. Guess what? The conversation turned to work. Here is how the conversation unfolded. Over the past year, good old SVF (that's the name of the company) has realized an increase in our current ratio and a drop in total assets turnover ratio. Conversely, SVF's sales, quick ratio, and fixed assets turnover ratio have remained constant. We are arguing about what could cause this. What do you think?
The second part of the question is this: We will obviously want to know how to correct these downturns. How do we do it?
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Solution Summary
The solution discusses what has caused the changes in the quick ratio, fixed assets, and current ratio changes at SVF.
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If there was an increase in the current ratio, this means that the company does a very good job turning its products into cash and the company has enough cash to pay off short-term obligations. The drop in total assets turnover could mean that customers who have balances in accounts receivables aren't paying their bills on time or the ...
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