The current assets/total assets ratio as well as the composition of current assets varies from one industry to the other depending upon a host of factors, of which the nature of operation is an...

The current assets/total assets ratio as well as the composition of current assets varies from one industry to the other depending upon a host of factors, of which the nature of operation is an important one. This fact leads us to study the current asset composition of three different groups of industries – manufacturing in general, food products and electronics. The major segments of the current assets of these different industries are presented here for a three-year period.

A detailed analysis shows that there is not only year-wise variation, but also the variation is manifest in the three industries with regard to the stress on maintaining current assets as a part of the total assets. Besides, there is variation in the share of different components in the total current assets. The current ratio too is not an exception. It too varies from industry to industry.

1. How much does current asset/fixed asset ratio vary among different sets of industries and what does this variation indicate?

 2. How far do different industries care for maintaining liquidity? Base your answer on the current ratios.

 3. What is the possible reason behind larger share of receivables than those of inventory in some cases?

 4. What is the possible reason behind larger share of inventory than those of receivables in some cases?