Managing Financial and Information Resources - Coursework Example

Gross profit margin showed an upward trend throughout the period; it increased from 57.76% in 2011 to 63.31% in 2013. This implies that the company earns more cents per dollar of revenue, and this is favourable because more profit is generated to cover non-production costs. Operating profit margin increased in 2012 but decreased in 2013. Even though there is a decrease, the company is still profitable because it is generating enough money from its operations to pay for both variable and fixed costs.

In general, the company’s profitability is improving as indicated by the increase in its profitability ratios (Kimmel et al 290). Efficiency ratios indicate how the company is managing its liabilities and using its assets to generate income. Fabrique Aérospatiale is relatively efficient in its operations. The debtor days increased from 59.33 days to 59.79 days in 2012, and further decreased considerably to 34.31days in 2013. This improvement in debtor days implies that the company’s efficiency in collecting its receivable increased (Kapil, 128).

The company is, therefore, very liquid because it takes less time to collect its receivable hence increase in efficiency. Creditor days increased from 91.56 days to 97.5 days but decreased to 78.43 days. This indicates prompt payment to creditors. This reduction implies that the company is trying to take advantage of the discount that the suppliers is offering. Fabrique Aérospatiale is inefficient in managing its inventory. It has higher values of stock days that is not favourable for the business.

Stock days increased from 134.21 days in 2011 to 142.5 days in 2012 but decreased to 116.14 days in 2013. Even though the decrease is a good indicator, it is very minimal. The company has higher days’ inventory on hand. In terms of liquidity, Fabrique Aérospatiale is very liquid. Both its acid test ratio and current ratio have values greater that one for all the years. The company is able to meet its near-term