According to the information from the newspaper, some news should be notified that the outstanding achievement for the last year, which the overseas buyers bought 80% of the 45,000 bikes Compton sold, with demand growing strongly among urbanites in Asia and the U.S., and it made £3.4m profit on a turnover of £28m last year and employs 240 staff, more than half of which have skilled manufacturing jobs. Compton exports its bikes to 44 countries, and has stores in cities in the Netherlands, Italy, Germany, Thailand and China. All the information, I collected from the newspaper mentioned how successful the Compton Bikes Company was last year. The overseas buyers bought 80% of the 45,000 bikes Compton sold, that means the liquidity …show more content…
The efficiency ratios include Average inventories turnover period ratio, Average settlement period for trade receivables ratio, Average settlement period for trade payables ratio, Sales revenue to capital employed ratio and Sales revenue per employee ratio. According to the news, the Compton Bike company is trying to increase the efficiency by invest 18 months in training its brazers. In my opinion, the level of efficiency and the efficiency ratios changed depend on the strategy that the Compton Bikes company use. The company planed either the numbers of inventories or the numbers of trade receivables or trade payables well before this year. However, the purpose for the company is to manufacture 100,000 folding bikes per year by 20Y1. The inventories will increase year by year, the trade receivables and the trade payables will increase also. On the other hand, the sales revenue, the credit purchase will increase at the same time. Therefore, the change of ratio is depended on the company to decide how many inventories they want to hold, how many trade payables and receivables they want to have. The ratio will change a lot depend on the company’s