Return on Assets is less than the industry average which means that the assets

Return on assets is less than the industry average

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Return on Assets is less than the industry average which means that the assets are not more properly utilized to generate income. Current ratio is less than the industry average and it was also less than the ideal current ratio which indicates that the current assets are not enough to pay its current liabilities and therefore financial position is not so much sound. Green Valley has little cash in hand than its competitors. But it can improve its cash position by cutting down the expenses and by increasing the cash reserves. By doing so it will bring the company in competition position again with its competitors. Company is also giving more time to its customers in collecting the receivables than the industry. It must try to collect the receivables from the customers as early as possible. This will help in improving the financial position of the company. Company also has more debt than the industry as it was clear from the ratio. It must pay off long term debt so that investors will think of investing the money in the company if it was able to reduce its debts. Times interest ratio is lower than the industry. Fixed assets turnover is more than the industry which indicates that the fixed assets are properly utilized to generate income.
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  • Spring '14
  • Current Liabilities, Financial Ratio, Generally Accepted Accounting Principles

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