Debt to Equity Ratio Increasing trend in the Debt to Equity Ratio, it means that the company is financing more from its creditors, rather than investors.
Receivable Collection Period In the case study, it is mentioned that one major challenge faced by Anandam is proper structuring of the credit periods. The less is the receivables collection period, the better it is. It can be seen that there is an increase in the receivables collection period, which shows that it takes a lot of time by the customer to pay the company. Industry average is 52 days, whereas for Anandam in FY 2014-15 it is around 106 days Interest Coverage Ratio Even though though the business was generating profits, the company’s ability to make interest make interest payments to its creditors showed a declining trend. Also, it is very less when compared to the industry average ratio.
Decision – Decision – Rejection Rejection of loan proposal.
