EXECUTIVE SUMMAY

As a business consultant for your business Expectations Ltd, a close analytical approach of you revenue statement and balance sheet allowed me to report on the following sections:

1. Liquidity
2. Solvency
3. Profitability
4. Efficiency

Together with the industry averages, the analyzing of theses ratios sets ways of planning to ensure your business will meet if has not the set industry averages. Evaluating the businesses liquidity, solvency, profitability and efficiency saw some major problems, which could put the business into huge financial risk if the situations are not addressed immediately.

Financial issues investigated include:

1. The liquidity of the business, the current ratio in 2000 (0.89:1) was way below industry average (2:1). In 2001 the issue had not been rectified, therefore dropping to (0.79:1).
2. The liquidity quick ratio in 2000 was 1:1, which is acceptable. However in 2001the ratio dropped to 0.59:1, which showed the business almost had DOUBLE the amount of current...