Solvency ratio indicates

The solvencyThe solvency ratio indicates whether a company’s cash flow is sufficient to meet its short-term and long-term liabilities. The lower a company’s solvency ratio, the greater the probability that it will default on its debt obligations.

Current ratioThe ratio is mainly used to give an idea of the company’s ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations.

A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt – as there are many ways to access financing – but it is definitely not a good sign. Current ratios for Sports UK

For year 2012

For year 2011

Acid test ratioA stringent indicator that determines whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory.

This record bellows shows performance of sports UK. 2011

Stock turn over= 72215 = 3.05 times236112012Stock turn over= 23611 x 365 = 119.3 days722152011debt collection period = 9024 x 365 = 962 days342122012debt collection period = 9098 x 365 = 904 days36696

2012asset turnover= 153487 = 0.64237028

2011asset turnover= 159921 = 0.73219013

Profitability ratiosMeasures that indicate how well a firm is performing in terms of its ability to generate profit. Those ratios measure financial metrics that are used to assess a business’s ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor’s ratio or the same ratio from a previous period is indicative that the company is doing well. Profitability ratios of Sports UK for 2011

Gross profit margin =81272 x 100 =52.95153487Net profit percentage = 6741 x 100 = 43.9153487

ROC E= 10753 x 100 = 21.949097

Profitability ratios of Sports UK for 2012Gross profit margin =83199 x 100 =52.02159921Net profit percentage = 6742 x 100 = 39.0159921

ROC E= 10310 x 100 = 20.949227