英语论文网

inventory, but using its cash and receivable. From the figures, we can see that as a business company, the current ratio is relatively satisfying and the company has a relatively ability to meet current obligation because a little weak in the situation in quick ratio of 2007. Following by debtor turnover and collection period, the dates show the good position, the net sales income always much more than average receivables balance despite they show the decrease tendency from 67.5 times in 2005 to 54.8 times in 2007, and the collection period is all not over one week, the company has not some problems with excessive of receivables balance. For its inventory turnover ratio, these 3 years are all similar which from 3.59 times in 2005 and 2006 little dropped to 3.52 times in 2007. It indicates that the sales of the firm always keep stable. All there liquidity ratio show us that this company has ability to its obligations and daily operation is in a good situation.

Solvency
We will focus on solvency ratios. The debt ratio has increased from 28.02% in 2005 to 39.57% in 2007. It means during these years, the company used more liability in its operation. So the percentage of assets which provided by creditors became higher and increase the burden of company. But everything has two aspects, if this company can controlled this in a reasonable situation; it is help to company, the decrease position on equity ratio, from 71.98% in 2005 to 60.43% in 2007. This ratio examines the relationship between total equity and total assets, the higher the equity ratio, the greater the asset protection to creditors. In this case, there does existence the risk of the business (Hogget, J, Edwards, L, & Medlin, J, 2006, p, 1068). And the capitalization ratio is similar equity ratio which is also providing useful information regarding long-term stability and the degree of risk. The asset turnover ratio is considered which measures the effectiveness of an entity in using its assets during the period, the data was all in the vicinity of 2.95 times. So we accept this situation. This company also has ability to meet its interest payment on borrowing out of current profits, though they decease from 9.7 times (2005) to 6.1 times (2007). From these solvency ratios, we can know this company has the ability to meet its long-term expenses and run the business stable and healthy.

Conclusion
With the explanations of related ratios on profitability, liquidity and solvency, we study the basic financial position and have a fundamental command of business activities of the Tick-Tock From the analysis of profitability, liquidity and financial, we fulfill the tasks in the introduction and have a deeper understanding of relationship between financial ratio and various financial abilities. We can know that Tick-Tock has ability to its obligations and daily operation is in a good situation, and also have the ability to meet its long-term expenses and run the business stable and healthy. But on the other hand Tick –Tock is making a decreasing profit with not stable profit from 2005 to 2007.As we all know profit is very important for a company. A company in the perfect competitive market decreasing and unstable profit means in the future with no good manager to manage this company, finally it will into bankruptcy. So these limitations would have big influence on the final decision, with the not ultimate satisfaction o