The Company’S Revenues Have A Steady Growth (About 20 %)

The company’s revenues have a steady growth (about 20 %) during the last four years ending in 2016 to be up to 7,838.4b. According to the company’s annual report in 2015, UK is Inchcape’s biggest geographical market, accounted for 40% of the total revenues, while the other geographic regions accounted for the remaining part of the revenues, Australasia (17.8%), emerging markets (16.1%), North Asia (10.9%), Europe (7.9%), and South Asia (7.3%). As for the profits after the tax, it is noticeable that the years between 2013 and 2014 there was a slight decrease from 200.8m to 187.2m. However, in 2015, the company’s profits started to grow again due to the acquisition of an Australian luxury automotive group and company’s strong presence in†¦show more content†¦Another ratio that presents a more stringent test of liquidity is the quick ratio which does not include the inventories. Inchcape’s quick ratio decreases about 20% during the peri od 2014-2016. In 2016, the company’s quick ratio is 0.5.The minimum level for this ratio is often stated as 1, so, Inchcape is possible to find difficulty in fully paying back its current liabilities. Working Capital For all the years, the average inventories turnover period for Inchcape represents two and half months’ sales requirements (73 days).Although the company’s nature explains why this ratio is quiet long, it would be helpful for the company to try to reduce this ratio, improving its inventories control. Similarly, its average creditor days are quiet high, too. It represents nearly 75 days (about two months).It seems that the company probably finds it difficult to meet its financial obligation towards to suppliers on time. Thus, it is recommended that Inchcape should negotiate better credit terms from its suppliers. On the contrary, Inchcape’s average settlement period for trade receivables (debtor days) is only 10 days. 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