Thesis: Current ratio of Johnson Arabia LLC

Sample Thesis Paper

In this regard the first analysis which has been done is the current ration of Johnson Arabia. The current ratio can be obtained by dividing the total current assets of the company by its total current liabilities. This ration expresses the working capital relationship of the current assets which means that what is the relationship between the company’s liabilities to its assets. It we look at the current ratio analysis of Johnson Arabia over the years it could be seen that there is a growing trend which means that the company is going towards the right direction as their relationship with assets to liabilities is on a decline.

Because in current ratio the current assets and current liabilities figures are taken it shows that the result which would be generated would be for one year. If we further elaborate this it could be said that the current ratio would tell that weather or not the company have enough resources to pay its liabilities over the next year. The trend which we see in Johnson Arabia’s current ratio is on a higher note like for instance if we take the current ratio for the year 2005 it is 1.74 which in other word means that for every AED in current liabilities Johnson Arabia have 1.74 AED in its current assets. This shows a growing trend for the company as they have the capability to pay off their liabilities within one year and still left with their assets.  Overall the current ratios of Johnson Arabia gives a good picture of the organization and the growing trend which could be observed from the chart also depicts the fact that the liquidity part of the company is pretty much safe.

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