Azerbaijan state economics university

Cost of Goods Sold	298,351	292,774	285,618
216,211
Day Inventory Ratio(Days)	35	34	33	41

BP’s company efficiency ratio indicates the efficiency to utilize the company’s financial ratios as described in the annual reports[ CITATION Nex07 \l 1033 ]. The company’s financial capability in utilizing the inventory fluctuates from 41 in financial year 2010 to 33 in subsequent year while the 2013 and 2012 financial year reveals a moderate of collection of 34 and 35 days in collecting cash from debtors. However, this reveals that, that the company’s gives an average time to their debtors before collecting cash enhance signifying good customer’s relationship which signifies standard growth in sales revenue.

Liquidity Ratios

Liquidity ratios is a financial ratio utilized in determination of the company’s ability of the company in gathering the outstanding current financial liabilities at the time of falling due. The liquidity higher values indicates that the company is of the better edge in financing the short term financial obligation when the fall due. The company’s liquidity is examine using current ratio, quick ratio, and cash ratio.

Current ratio

Current ratio refer to liquidity ratio describing the company’s efficiency in its operation while turning its inventory into cash to increase the company’s financial ability in gathering for the current liabilities[ CITATION Cho08 \l 1033 ]. Current ratio indicates the company financial ability in meeting its current financial liabilities in the financial period utilizing the current internal resources. The desirable current ratio is describe to be 2, thus, the higher the current ratio indicates more financial liquidity in gathering for the current financial liabilities. Current ratio is calculated by dividing the current assets by the current liabilities
Current Ratio = current assets / current liabilities

		Current Ratio
	Amounts in US$ Millions
Year’s	2013	2012	2011	2010
Current Assets	96,840	92,069	89,164	89,725