Projct - Admission/Application Essay Example

A value of 1 to 2 is considered to be the acceptable range. Deyaar development’s current ratio is 1.24, which is slightly higher than that of Arabtec Holding (1.22). On the other hand the quick ratio difference is higher than current ratio, whereby Deyaar Development has recorded1.23 while Arabtec Holding has recorded 1.16. This indicates that Deyaar has maintained a higher liquidity level than Arabtec Holding in 2011. This also means that Deyaar Development is able to meet its short term obligation using its current assets, better than Arabtec Holding (Tamari 25).

An accounts receivable turnover is an indication of how efficient an entity uses its assets. Deyaar’s ratio is higher than that of Arabtec, which means that its collection of accounts receivable and extension of credit is efficient. The inventory turnover for Deyaar Development was higher (165.3) than that of Arabtec Holding (15.7). This shows that Deyaar Development’s sales are moving faster than that of Arabtec. It could also imply that Deyaar is maintaining fewer inventories than Arabtec.

High accounts receivables turnover and inventory turnover also means that Deeyaar’s account receivable and inventory are easily convertible into cash. Deyaar’s Total debt Ratio is lesser (0.43) than that of Arabtec (0.62). This means that Deyaar’s assets compared to liabilities are more than Arabtec’s assets compared to liabilities. This also implies that Deyaar is less leveraged, which could mean less is spent on interest expenses. Deyaar’s TIE is way below that of Arabtec (1.28 vs. 20.1).

This indicates that Deyaar has a low level of debt, which could be dangerous because it could be missing investment opportunities which could be used to generate income (Tamari 25). Deyaar’s ROA is below that of Arabtec (0.002 vs. 0.039). This indicates that Deyaar is less profitable relative to its total assets as