Calculate the current ratio and quick ratio for sme


For your Key Concept exercise, refer to the 'SME Petroleum balance sheet' in your weekly Learning Resources and complete the following (500 words total for all parts):

  • Part 1: Analysis
    1. Calculate the current ratio and quick ratio for SME Petroleum.
    2. What is SME Petroleum's debt to equity ratio? How has the debt to equity position changed between 2010 and 2011?
    3. What is the net working capital of SME Petroleum?
  • Part 2: Reporting
    Based on your analysis of SME Petroleum and your reading on financial statement analysis in Chapter 9 of the Simkins & Simkins book, discuss the following:
    1. The relevance of financial analysis to ascertain company performance.
    2. The role of financial analysis in project financing.

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