Fairwood Cafe de carol

Liquidity 2012 2011 2012 2011 | Current Ratio | 1.46 | 1.34 | | 1.74 | 2.17 | | Quick Ratio | 1.32 | 1.20 | | 1.51 | 1.90 | Debt Management | Long Term Debt/Equity | 5.16 | 6.63 | | 0.00 0.00 | | | Total Debt/Equity | 6.16 | 8.96 | | 0.00 0.00 | | | Total Debt/Capital Employed | 5.52 | 7.91 | | 0.00 0.00 | | Profitability | Return on Equity | 25.92 | 26.48 | | 14.58 16.78 | | | Return on Capital Employed | 23.22 | 23.35 | | 14.21 16.37 | | | Return on Total Assets | 16.18 | 15.86 | | 11.63 13.60 | | | Operating Profit Margin | 8.28 | 8.84 | | 9.38 11.43 | | | Net Profit Margin | 7.14 | 7.43 | | 7.95 9.64 | | | | | | | | | Asset Management | Inventory Turnover | 54.64 | 50.35 | | 34.61 31.19 | | Investment Income Analysis | Dividend Payout | 95.74 | 73.06 | | 74.00 95.00 | |

Liquidity Analysis
Compare with 2011, Fairwood has a better result in 2012 for both current ratio and quick ratio. It is due to the increase in current assets and less current liability in 2012. It is safe for Fairwood to repay it's liability. Although Cafe de Carol gets an decrease in these both ratio, but they are still higher than Fairwood’s. Fairwood has a worse liquidity.

Debt Management Analysis
There is a much decrease in debt management ratio when comparing to 2011. It is because a huge amount of bank loan had been settled. It is a positive sign to decrease the risk of the company as the economy is unstable in 2012. It can reduce the risk of make a loss in bad economy. However, the main competitor Cafe de Carol gets zero debt, which means that it uses 100% common equity. It is free from paying interest expense.
Profitability Analysis
Fairwood has a