Campco Case Study

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5.0 FINDINGS, SUGGESTIONS AND CONCLUSIONS:
5.1 FINDINGS:
 The current ratio shows that the company is having sufficient fund to meet its short term obligations.
 The current ratio has been increased during the year 2013-14 as compared to the previous year.
 The company’s liquidity ratio shows a satisfactory trend in the year 2013-14, it is 1.7 times more than the previous year.
 The current assets to total assets ratio implies that the company is maintaining a considerable level of current assets in proportion to total assets.
 The cash to current asset is having decreased trend from year to year, this situation is not good for company in every year.
 The cash ratio of the company shows that the cash necessary to meet out the current
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 The debt collection period of the Campco Ltd is good when compared to past 4 years.
 The solvency ratio of the company is not good in the last 5 years, but it has been increased in the previous year by 0.2 times.
 The average cash to sales ratio is 0.018 times and which indicates that only 18% of sales has been maintained as cash with the business.
 The cash management techniques of the business is not functioning well in the organization, as its having less amount of cash than the assets of the organization.
 The operating profit of the Campco Ltd is increased during the year 2013-14 by 1.22% than the previous year 2012-13.
 The rule regarding funding the working capital in company can be said to be aggressive policy according to the cash to working capital ratio.
 The cash from operation of a company has been decreased from in the last year when compared to past 2 years, and it is insufficient for the company to use for its activities.
 The cash from investing/capitalizing activities of the company is negative in the past 5 years and it shows that the company is not having the better investment avenues to invest their surplus
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In case of excess cash it should be financed either in securities or should be used to repay borrowings.
 The company should try to formulate a proper ageing schedule of debtors. This will help them to lessen the bad debts and speed up collection from the creditors.
 The company should speedy in making payments so as to enjoy cash discount opportunities for the company.
 The Campco Ltd should control the optimal cash balance to keep.
 The Campco Ltd has followed an aggressive strategy of financing working capital should attempt to finance 50% of their working capital using long term source and increase their status.
 The current ratio of 2:1 is considered normally satisfactory. The company should try to improve the current ratio, so it should invest large amount in current ratio in order to maintain liquidity and solvency position of the concern.
 The company should try to follow a matching policy of financing current assets (i.e., using both long term and short term sources of finance).

5.3

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