Current ratio shows the ratio between the current assets and current liabilities and shows the ability of the company to meet its current liabilities out of its current assets. The liquidity position of the company is sound as it is maintaining the constantly the current ratio of around 1.6 and it is also at par with the industry average of 1.6. Further, quick ratio is also one of the ratios to assess the soundness of the liquidity position of the company. The quick ratio is also at par with the industry average of 0.9. However, inventory turnover of the company is lesser than the industry average of 8.4 which indicates that the inventory is not being managed efficiently and the company has to speed up its sales to improve the inventory turnover ratio. Average collection period is also one of the liquidity ratios. The receivables of the company is not being managed …show more content…
Total assets turnover denotes the amount of sales generated from each dollar of asset. Here, Vanguard is having less total asset turnover than the industry average and also lesser than the previous year's figures which indicates that the company is not using the assets efficiently to generate the sales. The company should increase its sales. The company is highly levered as the debt portion is more even though it could decrease its debt consistently over the years. However, the company has high operating income to cover its interest expense as the times interest earned ratio is showing the increasing trend and also is higher than the industry average. The manufacturing efficiency of the company is showing the decreasing trend as the gross profit margin is showing the decreasing trend and it is also lesser than the industry average of 20%. Even though the company has improved its operating profit margin over the years, its operating margin is lesser than the industry average of