Comment on the solvency of urban platter

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Reference no: EM133119423

Question - Urban Platter Corporation ("Urban Platter") is a retailer of premium soy sauce.

The following Table shows a summary of Urban Platter's financial ratios.

Name of Financial Ratios

2021

2020

Quick Ratio

0.9

1.1

Current Ratio

1.22

1.56

Debt Ratio

0.49

0.64

Return on Equity

39%

45%

Inventory Turnover

9.7 times

11.2 times

Note: There are 365 days in a year.

With reference to Urban Platter's Financial Ratios given above,

a) State the name of the financial ratio that indicates the solvency of Urban Platter.

b) Comment on the solvency of Urban Platter in 2021 as compared to 2020 based on the performance of the ratio identified in (a).

c) Compute Urban Platter's inventory holding period for 2021.

Reference no: EM133119423

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