Current Ratio

During 2015, ABS – CBN’s current ratio is 1.88 times while GMA has 2.24 times current ratio. From the
computed ratios, it can be interpreted that GMA has more ability to meet its short term debts through the use of
their current assets.

Quick Ratio

With 1.66 times quick ratio in 2015, GMA has the greater capability of meeting its short term obligations by
using their assets that are readily convertible into cash compared to ABS – CBN whose quick ratio is only 1.53
times.ABS – CBN’s quick ratio is lower than its current ratio which means that its current assets is very much
dependent on inventories.

Trade Receivables Turnover

ABS – CBN has a trade receivables turnover in 2015 of 3.44 times while GMA has 3.15 times. This indicates
that ABS – CBN is more efficient in collecting its receivables from its customers than GMA.

Fixed Asset Turnover

1.79 times is ABS – CBN’s fixed asset turnover ratio in 2015 while GMA has 2.72 times. This shows that GMA
utilizes its fixed assets better than ABS – CBN. This may also mean that ABS – CBN’s low fixed asset turnover
ratio is due to overinvestment of plant, equipment or other fixed assets.

Asset Turnover

In 2015, the asset turnover ratios of ABS – CBN and GMA are 0.56 times and 0.97 times respectively. This
denotes that GMA is more effective in using all of its assets in generating sales than ABS – CBN.

Average Collection Period

The average collection period of ABS – CBN during 2015 is 106.22 days while GMA needs 115.77 days in
collecting cash from its customers. This signifies that ABS – CBN is prompter in collecting cash and is better in
managing receivables since its collection period is shorter than that of the GMA’s.

Payable Turnover

The payable turnover ratio of ABS – CBN in 2015 is 1.63 times when GMA got 2.83 times payable turnover
ratio.

A higher value indicates that the business was able to repay its suppliers quickly. Using the computed ratios, it
is safe to say that GMA can repay its suppliers faster than ABS – CBN. Thus higher value of accounts payable
turnover is favorable and is important to suppliers since they are interested in getting paid early for their
supplies.