What recommendations would you make based on these ratios

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Black Sparrow Aviation, Inc. is concerned they are not maintaining adequate liquidity. The accounting department has provided you, the newly hired finance manager, with the following ratios:

Current ratio 4.5

Industry norm 4.0

Quick ratio 2.0

Industry norm 3.1

Inventory turnover 6.0

Industry norm 10.4

Average collection period 73 days

Industry norm 52 days

Average payment period 31 days

Industry norm 40 days

In your opinion, what do these ratios indicate about Black Sparrow Aviation, Inc.?

What recommendations would you make based on these ratios? What results do you think you can achieve if your recommendations are followed? Why might your recommendations not be effective?

Reference no: EM132005766

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