::: vuaskari.com ::: FIN622 GDB Result Announcement by Teacher

 

Dear Students,

 

The result of GDB No. 01 has been published. You can view the result on VU-LMS.

 

The discussion question asked in GDB was covering the topic of "Ratio Analysis" in general and "Current Ratios" in specific. Most of the students could not get the actual point required in requirement # 1. It was asked to discuss the increase in current ratio because of sale of inventory. But most have discussed the reasons of increase in current ratio. That was totally wrong.

 

The actual answer in detail was this,

"When inventory is sold out, either cash or receivables will increase. In this situation one current asset is converted into another current asset. Inventory is recorded at its cost and sale includes profit margin also. It means fall in one current asset is less than rise in other current asset. It results in high current ratio."

Some students have attempted it correct. They are marked with great appreciation.

 

In second requirement it was asked that is it positive or negative for the organization? The answer was that, it is positive for the organization because its current ratio is very near to the standard ratio which is 2:1.

Most of the students have attempted it correct.

 

You are advised that read the question and its requirements very carefully before attempting and think according to the requirement in the question. In this question you should discuss that reason of increase in current ratio which was given in the question but you have discussed all the possible reasons that results in increase in current ratio.

 

Wish you best of luck for upcoming Midterm Examination.

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