Track: Case Studies
Abstract
In this study a financial analysis of a small scale gold producing and selling company was done to determine the liquidity of the organization. The gearing ratio was found to be as high as 44.5% with a company equity of $412 000. The debtor’s collection period was 34.7 days with debtor’s turnover ratio of 5.73. The creditor’s turnover ratio was 1.67 with an inventory turnover of 0.83 and a net profit margin of 6.3% was realized. The analysis indicated that the organization’s liquidity was depressed.