Tea economics: part II

摘要

It is very difficult to collect financial information from tea estates or tea companies. Profitability can be accurately calculated for any tea estate or company if all relevant financial information is available. A comprehensive analysis based on some standard financial ratios needs to be worked out for assessing financial performance situation of the tea company. Working Capital Ratio as an indicator of liquidity strength of the company is considered as the Acid Test Ratio. Declining trend in Working Capital Ratio indicates increasing dominance of current liabilities over current assets and warns about the floundering position in the availability of Working Capital. This is likely to affect the sustenance and development of tea company adverselyunless effective/corrective steps are immediately taken to root out the problems.