Current ratio of Reliance weaving 2008 2009 2010 2011 0.84 0.79 0.83 0.

90

current ratio
0.92 0.9 0.88 0.86 0.84 0.82 0.8 0.78 0.76 0.74 0.72 2008 2009 2010 2011

current ratio

Interpretation

From 2008 to 2009

Current ratio decrease because cash, short term investment, account receivable inventory, prepaid expenses decrease only other current assets increase. In this so overall current assets decease. Current liabilities also decrease. In this account payable increase, accrued expenses also increase but short term borrowing, current portion of long term debt and other current liabilities decrease a lot.

From 2009 to 2010

Current ratio in this period increase due to increase in total current assets and current liabilities. Cash increase because 47% increase in revenue and account receivable also increased. Short term investment also increase due to increase in available for sale. Other receivables also increase due to increase in sales constantly b

Inventory decrease due to increase in sales. Raw material and work in process inventory increases but finish goods and waste decrease a lot and sales increase. Thats way inventory decreases. Prepaid expenses decreases constantly Current liabilities Account payable increases to credit purchase of yarn raw material. Prices of yarn increases and company purchase it on credits Accrued expenses decreases due to Short term borrowing also decreases because company repay its borrowing. But companys long term borrowing increases which increases current maturity. Other current liabilities also increases due to

From 2010 to 2011

In 2011 cash decrease as compare to 2010. The reason is high prices of yarn which is increased in previous year. In this year sales increases but cash not received. Sales made on credit so account receivable increases from last year. Short term investment in his year is decreased now because of decrease in adjustment and transfer of shares. Inventory increase in this year is due to finish good inventory increase a lot. The finished goods, when manufactured and ready to delivered, contract were cancelled or company had to offer big discounts which led to a decline in the Company's gross profit. Prepaid expenses decreases in this year due to not paying expenses in advance payable increase in period and company focus on growth. Current liabilities Account payable increases in this year due to increase in raw material purchased. Acc rued expenses and short term borrowing also increases due to short term finances and export finances increased. Other all current liabilitiesalso increased.

The finished goods, when manufactured and ready to delivered, contract were cancelled or company had to offer big discounts which led to a decline in the Company's gross profit.

after that it has an increasing trend stores and spares increase from2009 to 2011 specially spares increase a lot. Raw material inventory