This report describes the first-ever cost analysis of a current ratio measures overall short-term

liquidity and is an indicator of the

short-term debt-paying ability of the firm. * The quick ratio also is a measure of short-term
liquidity. However, it is a measure of more immediate liquidity that the current ratio and is an
indicator of a firm's ability to pay all of its immediate debts from cash or near cash assets. The
quick ratio is also an indicator of the degree of inventories in its current assets when compared
to the current ratio.
* Inventory turnover is an indicator of the number of times a firm sells its
average inventory level during the year. A low inventory turnover may indicate excessive
inventory accumulation or obsolete inventory * Return on equity is a profitability ratio. It
measures the return on stockholders' investment and is used to evaluated the company's success
in generating income for the benefit of its stockholders (i.e., management effectiveness).

The one-way analysis of variance (ANOVA) is used to determine whether there are any
statistically significant differences between the means of three or more independent (unrelated)
groups. This guide will provide a brief introduction to the one-way ANOVA, including the
assumptions of the test and when you should use this test. If you are familiar with the one-way
ANOVA, you can skip this guide and go straight to how to run this test in SPSS

The two ratios that each of the four entities would specifically use to examine Avantronics are
as follows. * Mid Coastal Bank would employ the current or quick ratio. * Ozawa Company
would employ either the current or quick ratios in conjunction with the inventory turnover. *
Drucker & Denon would employ return on equity. * The Working Capital Management
Committee would review the current or quick ratios and the inventory turnover ratio.
Overall costs were estimated by examining records and papers and by interviewing staff. Cost
apportionment was carried out in three stages. In the first stage, all direct expenditure was
calculated for each activity, e.g., wards, outpatient department, tuberculosis services, etc. In the
second stage, general service costs, covering water, sanitation, security, and administration were
divided among the various services. In the third stage, the costs of laboratory services were
distributed according to the number of examinations carried out for each service.
Avantronics appears to have a strong current/liquidity position as evidenced by the current and
quick ratios that have been improving over the three-year period and that have exceeded the
general guidelines. In addition, the current ratio is greater than the industry average and the
quick ratio is just slightly below. However, the increase in the current ratio could be due to an
increase in inventory levels. This fact is confirmed by the deteriorating inventory turnover ratio
that is also below the industry average. Overstock or obsolete inventory conditions may exist.
Avantronics' profitability is good as indicated by the relatively high return on equity -- greater
than the industry average.