AJAX Electronics Case Summary

Mr. Roberts is an owner of AJAX Electronics which started as a manufacturing process control consulting firm. After few years Roberts started producing customized industrial sensors for the customers. Later he realized there is a great potential in medical field so he started investing in low end defibrillators for emergency medical applications. Now his company has two product lines mainly industrial sensors and low end defibrillators.
Mr. Robert has many strengths:
1. Always Motivated – He has a zeal to take his company forward. He always thinks he can do better. After feeling that Webster bank is not aiding his company he approached savemebank with his proposal.
2. Farsightedness – He knew there is lot of potential in medical field and there would be much greater demand in future.
3. Ambitious – His top priority has always been his company. He has only

2. Inventory Turnover Rate is very low: The average inventory turnover rate for this industry is around 4.0. The AJAX electronics has lot of inventory around $252,000. Calculating the inventory turnover by dividing the COGS ($222,000) by inventory ($252,000) comes out to be very low 0.88. in order to obtain a turnover of 4.0 inventory of $197,000 should be sold. Also, if I consider the projected cost of goods sold to be 416 from the Income statement and assuming the inventory stays as $252,000, the Inventory turnover comes to be 1.6 which is again too less.
3. Current and Quick ratio below average: - The current ratio from has been decreasing from the previous years. It was 1.86, 1.63 and 1.51 for years 2000, 2001 and 2002 respectively. Similarly, the quick ratio is also low. Quick ratio is 0.49, 0.51, 0.41 for years 2000,2001 and 2002 respectively. This means company always have been deprived of cash. It has low liquidity position which means it is difficult for the company to pay its current