Ratio Analysis by

In pairs, outline two ways that Shampooch could improve their current ratio

nishathaveri — 2025-01-20 05:47:03 UTC

23/01/2025 Lauren and Zoe

2025-01-23 04:03:11 UTC

N*1:

cutting overhead expenses

--> for example the stock don't need you can take that into account and buy less for the next month.

N*2:

Paying off liabilities

-->If they're renting the place they could either buy it or find something cheaper.

Jashan & Majid

2025-01-23 04:03:51 UTC

invest the money that is sitting idle into the business.

pay off all short term/long term loans.

Sanaya

2025-01-23 04:04:34 UTC

Consider short-term investments or cost-cutting measures to retain more cash.

Extending payment terms reduces the immediate burden of current liabilities without impacting operations.

Aarul

2025-01-23 04:05:09 UTC

Reduce the amount of idle cash kept in the business, can be invested into other assets

Reduce amount of stock that the business has leftover, if they aren't selling it all and it being the least liquid, it makes it difficult to have money for other investments

2025-01-23 04:05:42 UTC

1. Increase Cash Flow: Shampooch could focus on collecting payments faster from debtors (customers who owe money). For example, offering discounts for early payments can help improve liquidity and increase cash available.

2. Reduce Current Liabilities: Shampooch could renegotiate payment terms with creditors (suppliers) to extend the time they have to pay, thereby reducing immediate obligations and improving their current ratio.

Nic

2025-01-23 04:06:24 UTC

Businesses can reduce costs by cutting overhead, such as adjusting stock purchases, and addressing liabilities, like lowering rental expenses through purchasing or relocating.

23/1/2025 Zahar

2025-01-23 04:07:14 UTC

Reduce Liabilities: Pay off debts or extend supplier payment terms.
Increase Assets: Boost cash, speed up receivables, or sell inventory faster.