Yes I would invest in this company because it shows a firm has ability to pay its current liabilities using assets that can be converted to cash in the near term. Even there is higher trend in gross profit margin ratio. Generally, the faster the inventory turnover, the less cash a company has tied up in inventory and the less the chance of inventory obsolescence.
Even the Quality’s return on assets has improved. The liquidity ratio of the company reflects that the company has short-term ability to pay its maturing obligations and to meet unexpected needs for cash. e can compare liquidity ratios, profitability ratios, and solvency ratios by looking at consolidated income statements, balance sheets, shareholders equity, etc. and compare present and previous years, there has been a percentage increase and will continue to rise as a turn in consumer consumption based on their need to change .
With other ratios that determine other key factors for investing, liquidity gives that the Cotte company has the ability to pay off their short debts, solvency shows that Cotte can meet their long-term obligations, and profitability shows that Cotte sales bolsters their assets so their income grows steadily.
