The liquidity of the business increased as we can see from the liquidity ratios . The current ratio increased significantly while the quick test ratio also increased but not by that much. Thus by looking at these ratios we know that more cash was available to BlackSea in 2010 than it was available to them in 2009.
The efficiency ratios suggest a mixed picture about the business. This is where the ratio analysis lacks. A comprehensive insight is needed into the situation of BlackSea. We know that the customer collection period increased which is a bad sign as far as liquidity is concerned. Now the debtors will take more time to pay. However they are still better than the industry’s companies as they have a customer collection period of 69 days. However the assets to sales ratio decreased. This means that the assets were better utilized in 2010 than they were utilized in 2009. There the efficiency of the asset utilization increased. The accounts payable to sales ratio also decreased slightly. This means that the suppliers are paid more quickly in relation to the sales volume. Therefore the efficiency ratios states that the business became more efficient. The increase in customer collection period can be due to the fact that now the company was making larger sums of sales therefore the customers took time to arrange the money. This shows the increased profitability of the business. However, we can only assume such things and we need strong comprehensive data to support our ratios.
The gearing ratio however depicts a clear picture about the company. It clearly states that in 2010 BlackSea got into a more risky position as the gearing increased. The borrowing of loan could be due to many reasons including the need for immediate cash resources.
The investment ratios also depict a mixed picture about the company. The share rice decreased while the dividend cover increased. This means that now the company was in a better position to pay dividends but the market price of the shares decreased.