According to the current ratio, for every dollar of liability, there is close to $17 of assets to cover it, this implies that the short term debts will be easily paid if necessary. The Acid Test Ratio indicates the same healthy relationship between the liabilities and the assets, showing that the company can convert their assets quickly to create a quick conversion to cash. Inventory turnover indicates that the company does not tie up their cash for a long period of time; there is a quick change over rate.
The profitability ratios also indicate the Kudler Fine Foods is a strong company, though the profits are not huge in relation to the net sales. For each dollar of assets there are $4 of sales generated. …show more content…
The Times interest earned shows that Kudler has the ability to meet interest payments when they become