Liquidity Ratios:

For 2020:
 Quick ratio = (CurrentAssets-Inventory)/CurrentLiabilities = (Actifs
Courants-Stocks)/Passifs Courants= ( 75 801 250 - 34 419 302)/ 161 483 266 = 0.256262
 Current ratio = CurrentAssets/CurrentLiabilities =Actifs Courants/Passifs Courants =
75 801 250/161 483 266 = 0.469406
 Cash ratio = (Cash Equivalents+Marketable Securities)/CurrentLiabilities = (Liquidités et
équivalents de liquidités)/Passifs Courants = 3 719 281/161 483 266 = 0.023032
 Days sales outstanding = Gross Receivables/(Net Sales/365) = Clients et comptes
rattachés/(Revenus/365) = 30 294 556/(75 362 134/365) = 146.72505
 Accounts receivable turnover ratio = Net Sales/Average Gross Receivables =
Revenus/ [(Clients et comptes rattachés 2019 + Clients et comptes rattachés 2020 )/2] =
75 362 134/[(56 578 563 + 30 294 556)/2] = 1.73499
 Average Receivables Turnover in Days = 365/Accounts Receivable Turnover Ratio =
365/1.73499 = 210.37585
 Days Sales In Inventory = Ending Inventory/(COGS/365)=Stock Final/[(Stock Initial+ Total
Achats Approvisionnements Consommés - Stock Final) /365] = 35 584 092/[(26 045 973 +
50 046 398 - 35 584 092)/365] = 320.63059
 Inventory Turnover Ratio = COGS/Average Inventory= (Stock Initial+ Total Achats
Approvisionnements Consommés - Stock Final)/ [( stock initial + stock final)/2] = 1.31456
 Inventory Turnover in days = 365/ Inventory Turnover Ratio = 277.65944
 Working Capital = Fonds de roulement = Curren tAssets - Current Liabilities=
Actifs Courants - Passifs Courants = 75 801 250 - 161 483 266 = -85 682 016
 Sales To Working Capital ratio = Sales/AverageWorking Capital= Revenus/ [(Fonds de
roulement final + Fonds de roulement initial)/2] = 75 362 134 / [(-85 682 016 -
221305274)/2] = -0.490979

For 2021:
 Quick ratio = 0.409693
 Current ratio = 0.764752
 Cash ratio = 0.030172
 Days sales outstanding = 139.72993
 Accounts receivable turnover ratio = 3.16945
 Average Receivables Turnover in Days = 115.16194
 Days Sales In Inventory = 268.80345
 Inventory Turnover Ratio = 1.56273
 Inventory Turnover in days = 233.56562
 Working Capital = -31128302
 Sales To Working Capital ratio = -2.0898
For 2022:
 Quick ratio = 0.292779
 Current ratio = 0.751748
 Cash ratio = 0.0145612
 Days sales outstanding = 103.55382
 Accounts receivable turnover ratio = 3.37822
 Average Receivables Turnover in Days = 108.04507
 Days Sales In Inventory = 360
 Inventory Turnover Ratio = 1.26765
 Inventory Turnover in days = 287.93437
 Working Capital = -43032026
 Sales To Working Capital ratio = -4.08707

Liquidity analysis:
Comparison with prior ratios:
-the company's quick and current ratios improved from 2020 to 2022 ( but it’s worth noting
that the company exhibited a more substantial improvement in its quick and current ratios
between 2020 and 2021 compared to the subsequent year) which suggests better liquidity and
a stronger ability to cover short-term obligations with its current assets. However, the cash
ratio decreased over the same period, indicating a potential reduction in the proportion of cash
and cash equivalents relative to current liabilities.
-The consistent presence of negative working capital indicates persistent short-term financing
stress, which might suggest that the company relies heavily on short-term liabilities to fund its
operations.
-the STIP group demonstrated positive trends in its liquidity and efficiency ratios. The Days Sales
Outstanding decreased, indicating improved efficiency in collecting receivables. The Accounts
Receivable Turnover ratio increased, reflecting a more frequent turnover of receivables, which
is positive for cash flow.
However, there are concerns in inventory management. The Days Sales In Inventory increased
in 2022, suggesting a potential slowdown in inventory turnover. Simultaneously, the Inventory
Turnover ratio decreased, indicating a lower frequency of inventory turnover.
Comparison with U.S industry averages: (2020-2021)
Current Ratio:

2020 2021
STIP Group: 0.469406 STIP Group: 0.764752
U.S Industry Average : 2.29 U.S Industry Average (2021): 1.66

Analysis: The STIP Group's current ratio in 2021 improved but is still lower than the industry
average. A current ratio below 1 indicates potential difficulty meeting short-term obligations,
and in this case, it suggests a notable shortfall compared to the industry standard.There might
be a need for better management of short-term assets and liabilities.
Quick Ratio:

2020 2021
STIP Group: 0.256262 STIP Group: 0.409693
U.S Industry Average: 1.35 U.S Industry Average: 0.75

Analysis: The quick ratio improved but is still below the industry average. The company may
need to focus on improving its liquidity position.
Cash Ratio:

2020 2021
STIP Group: 0.023032 STIP Group: 0.030172
U.S Industry Average : 0.93 U.S Industry Average : 0.40

Analysis: The cash ratio is relatively low, suggesting a limited ability to cover short-term
obligations with cash and cash equivalents compared to the industry standard.
Receivables turnover (Days):

2020 2021
STIP Group: 146.73 STIP Group: 139.73
U.S Industry Average : 31 U.S Industry Average : 54

In 2020, the STIP Group's receivables turnover days (146.73) were significantly higher than the
U.S industry average (31), indicating a much longer collection period for receivables compared
to the industry.
In 2021, the STIP Group improved its receivables turnover days (139.73) but is still higher than
the industry average (54), suggesting the need for continued efforts to shorten the collection
period.
Inventory Turnover (Days):

2020 2021
STIP Group: 320.63 STIP Group: 268.80
U.S Industry Average : 70 U.S Industry Average : 77

In 2020, the STIP Group's inventory turnover days (320.63) were significantly higher than the
U.S industry average (70), indicating a much longer period to sell inventory compared to the
industry.
In 2021, the STIP Group improved its inventory turnover days (268.80) but is still higher than
the industry average (77), suggesting the need for further efficiency in managing inventory.
**- Data source : Tires and Inner Tubes: Average Industry Financial Ratios for U.S. Listed Companies from
https://www.readyratios.com/sec/industry/3011/

-We used U.S tire industry ratios because there are no comparable values in Tunisia since STIP is the only tire
manufacturer here. 2022 comparisons were not included because there is no available data.