Ipplepen Plc Essay Example | Topics and Well Written Essays - 1500 words

Ipplepen Plc - Essay ExampleThe ongoing ratio is a very good 1.82. It shows that the ac unions current assets are nearly devil time its current liabilities. This is a good solvency position for any company. The acid test ratio to a fault shows a healthy liquid position of the company, where its current assets over its stock assets are about 1.19 quantify its current liabilities. The figures for acid test ratio are not available for 2005. The liquid state position of the company is good, and it reflects good working capital utilization by the company. Apart from the revenue generated from operations, the company indulges in spend and financing activities. In the year 2006, the company invested to the tune of 636,000 in Internet development, and trademarks to the value of 30,000. The corresponding investments for 2005 were nil. Ipplepen invests its cash, at bank and in hand, under the bank deposit rates. Short term deposits are besides universeness made at floating rates, af ter taking into account the meeting of the cash requirement. The company has a good amount of undrawn committed borrowing facilities also. The bank overdrafts are charged at 5.46% per annum in 2006, which was 5.38% per annum in 2005. A slight increase in average effective interest rate is seen. Overall, the liquidity position of the company is good and the company is solvent.... The company is showing a consistent growth in all profitability measures. It is a profit making company, and there are reasons that it is worth commit in the company.Liquidity assessmentThe liquidity position of the company in 2006 is strong, as can be seen from the liquidity measures of working capital, current ratio, and acid test ratio. The working capital is positive and has increased from around 29,886,000 to 38,924,000 in 2006. The company has performed well in managing its capital in the previous year and this year it sees an increase in its working capital. The current ratio is a very good 1.82. It shows that the companys current assets are nearly twain times its current liabilities. This is a good solvency position for any company. The acid test ratio also shows a healthy liquidity position of the company, where its current assets over its stock assets are about 1.19 times its current liabilities. The figures for acid test ratio are not available for 2005. The liquidity position of the company is good, and it reflects good working capital utilization by the company. Apart from the revenue generated from operations, the company indulges in investing and financing activities. In the year 2006, the company invested to the tune of 636,000 in Internet development, and trademarks to the value of 30,000. The corresponding investments for 2005 were nil. Ipplepen invests its cash, at bank and in hand, under the bank deposit rates. Short term deposits are also being made at floating rates, after taking into account the meeting of the cash requirement. The company has a good amount of undrawn committed borrowing facilities also. The bank overdrafts are charged at 5.46% per annum in 2006, which was 5.38% per annum in 2005. A