# data[].attributes.body
Question 2
ROCE：The company's ROCE increased from 2018 to 2019, indicating that the company's ability to generate revenue from limited resources is increasing.Meanwhile, ROCE in 2019 exceeded the industry average.

GPM：Compared with 2018, the GPM in 2019 has dropped significantly, and it has been lower than the industry average for two consecutive years, indicating that the company's ability to control costs is weak.it means that the company cannot retain more sales revenue.

NPM:the company ‘s profits and the rest of the revenue goes to cover cost of production, operating expenses and taxes had increased from 2018to 2019,it meansThe company's ability to control operating costs has increased.

Current ratio: it means it is more liquid and in a better position to pay of liabilities，it means it is more liquid and in a better position to pay of liabilities

quick ratio:the The company's quick ratio is close to 1:1, which is an ideal state and represents the company,it means The company can make good use of cash to achieve the company's current operating goals.

ihp:the The IHP is very short, and the company sells goods quickly, but it is lower than the industry average. It may be that the company does not have enough inventory.

receivable collection period:The company's collection cycle is lower than the industry average, indicating that the company's credit management system is very mature and the collection efficiency is very high.

Ppp:The creditors of the company like the company because they pay back quickly, but they may not have enough cash on hand.

Gearing:The company does not have much debt, and their debt level is lower than the industry average, indicating that the company is less likely to go bankrupt and has a lower debt risk

# data[].attributes.body
Q1
Liquidity:
The current ratio of this company for two years, both didn't reach thed ideal ratio and quick ratio of these two years are fairly good, and both the liquidty are decreasing , which means they are less likely to meet their short term obligations.

Efficiency:

The IHP is increasing, meaning that they are holding their inventory for longer times. This might cause extra expenses for stocking, and reduce the operating profit for the year.

The RCP is also increasing, meaning that they are collecting their receivables more slowly. This might cause some trouble of their cash flow, and probably they should be evaluating the credit of their customers.

The PPP is decreasing, meaning they are paying their payables quicker. This might add some credit for the company, but it might result in less cash in hand, causing less return on investment. The company might be seeking for benefits from early payment discounts
Q2
A ROCE value indicates that the company can invest more of its profits back into the company to benefit shareholders.

The decline of Gross profit margin indicates that the income of the

enterprise after paying the direct operating costs decreases, and the profitability decreases.
An increase in Net profit margin indicates that the company has become more efficient at converting sales into actual profits.
A company with a current ratio of 2:1, meaning that current assets are twice as large as current liabilities, and a ratio above 1.0 indicates that the company is financially stable and able to pay current debts and

invoices.
a quick ratio higher than one indicates higher liquidity and means you have more than enough liquid assets to cover your current obligations. ‍

Inventory holding period decrease indicates that the company is able

to turn its inventory into sales more quickly

Payables payment period decrease indicates that the company is paying its bills relatively quickly

A Gearing ratio between 25% - 50% is considered normal, and an increase in this ratio indicates that a company is more financially leveraged and more vulnerable to economic downturns and business

cycles.

To sum up, the company's financial situation is good compared to the

industry average, and its profitability has increased compared to last

year, and its financial situation is still stable

# data[].attributes.body
1. A company's current ratio below 2:1 and a company's quick ratio below 1:1 is evidence that its company does not have enough cash to pay its short-term debts.
2. The operating cycle of the company's cash has gone from 18 days to 30 days. Longer cycle time and longer time to convert to cash.
3. There is little difference between the quick ratio and the current ratio for both years.The company is better controlled.

# data[].attributes.body
The company's current ratio in 2018 was 1.05, and it became 1.02 in 2019. The standard value of current ratio is 2:1. The company's current ratio is far below the standard value, which shows the company's ability to repay debts with cash very bad. The company's quick ratio in 2018 was 0.97, and it became 0.9 in 2019. The standard value of the quick ratio is 1:1. Although the company's quick ratio is very close, it is still lower than the standard value. It shows that the company's ability to obtain cash in a short period of time is relatively low. The above two figures show that the company's asset liquidity is poor. At the same time, 2019 is worse than 2018.

The company's IHP in 2018 was 10, and it increased to 17 in 2019, indicating that the company's inventory consumption cycle has slowed down. It may be because the company's marketing ability has declined, or the company's turnover is relatively slow.

In general, the company's IHP is at a low level, which may be caused by the characteristics of the company's industry. But the company still runs the risk of running out of stock.

The company's RCP was 50 in 2018 and 53 in 2019. The RCP states how long it takes for the customer to pay. Its increase may be due to the company's ability to collect payments has declined, or it may have a shortage of cash flow.

The company's PPP in 2018 was 42, and it dropped to 40 in 2019, indicating that the company's payment speed has become faster. In situations where the company's assets are illiquid, faster payments can lead to cash flow shortages and credit problems.

# data[].attributes.body
Liquidity
The current ratio and quick ratio are both declining from 2018 to 2019. The current ratio is below 2 and the quick ratio is below 1 which shows that the company has liquidity issue and face going concern problems.

Efficiency
The inventory holding period of 2018 and 2019 are below 30 days, showing that the inventory turnover is ok. However, the days are longer than last year. Besides, the receivables collection period and payable payment period are both above 30 days, which indicates a long time to collect money and pay the money to suppliers.
The working capital cycle of 2018 and 2019 is 18 days and 30 days respectively, which is almost two times longer than the previous year. It means it takes much longer time to convert inventories into cash.

All the figures imply that the company is operating more badly than the previous year.

# data[].attributes.body
Q1
Liquidity

Current ratio decreases slightly from 1.05 to 1.02, also it’s much lower than the ideal ration 2:1. It indicates that the firm’s ability to cover its short term obligations is weak and is decreasing.

Quick ratio is also lower than the ideal ratio which is 1:1, and it decreases to 0.9 compared to 0.97 of the previous year. It shows that the firm doesn’t have good ability to generate cash on short notice to meet its current obligation.
Overall the liquidity of the company is not good.

Efficiency

Inventory holding period expands from 10 days to 17 days. It means that it takes longer time to sell the products. But considering the company is a service  company, which doesn’t need much inventory, so this won’t be a big problem.
Receivables collection period expands from 50 days to 53 days, which implies that it takes the firm more time to receive the payment from customers, but the change is not big.

Payables payment period reduced slightly from 42 days to 40 days and it show that the firm spends less time to pay the suppliers.

The cash operating cycle changes from 18 days to30 days. It takes the firm more time to receive the cash inflow after outlay on inventory.

The company had preformed less well than the previous year.

Q2

Profitability

Return on capital employed increased from 16.3% to 18.72% and its above the industry average. It shows the company has good ability to generate profit using the resources.

However, its Gross profit margin falls from 30% to 24.46% and it is lower than the average,35.23%, of almost half(44%). It implies that the company does not have good ability to control the Cost of goods sold.

Net profit margin increased from 3.9% to 4.87% and beyond the average 4.73%. Considering the Gross profit is not ideal, the company may perform well to control the operating expenses and financial costs.

==========

Liquidity

Current ratio increased slightly from 2.1:1 to 2.2:1. It is higher than the average 1.9:1 and close to the ideal ratio. It indicates that the company has good ability to cover its short-term obligation.

Although the quick ration drops from 1.52:1 to 1.47:1, it is still higher than the industry average. Therefore it can be concluded that the company has adequate cash to meet its current obligation. However, it may holds too much cash and hence impede its efficiency.

===============

Efficiency

The Inventory holding period is shortened from 27 days to 25 days and Lower than the average of 35days. It shows the fast speed of company to sell their inventory. But it also indicates that the company could be running out of stock thus loss profitability. It could also be caused by inefficient suppliers.

Receivables collection period remains 40 days and lower than the average of 52 days. It takes shorter time for customers to pay the invoice of their products and the company can receive the income quicker. Nevertheless, the credit policy is tend to be rigorous and may hamper the sales for that reason.

Payables payment period drops from 37 days to 32 days and noticeably lower than the average 49 days. It implies that the company pays the suppliers quick and it may benefited from good credit rating and the early payment discount. But at the same time the company has less cash.

==========

Leverage

Gearing increases from 25.75% to 27.5% but it is still an acceptable ratio and lower than the average 32.71%. It indicates that the company has good control of its debt finance to resources in the business. And they have less risk of future insolvency and more flexibility to management.