Rock Castle Case Study
The result of the ratio analysis is showing that Rock Castle is in a good financial position. The current ratio is 9.49 is way more than having 2:1 ratio. However, the current debt ratio of the company is 59.1% which indicated that we have a high percent of the debt, we must take action in order to find alternatively activates in order to bring this percentage down to a least to the 40s. Also, the analysis shows the profit margin is really good, which is 35.56%. The percentage of the sales in the dollar is high which indicate that we are making almost 36 cents per dollar.
As I can see the only thing that we have to take off is the debt ratio. I recommend doing an analysis of the clients that have any kind of debt in the company. I think
it is important to pay attention to the age of the debt, may be some of the debt is for customers that do not have any more business with us. I think that this is a good opportunity to also bring some of the old customers back.
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