Question

Do you see any problem with long-term and short-term solvency for Ralph Lauren?

Short-Term Solvency Ratios
Date	Current Ratio	Quick Ratio
Mar-20	1.613	1.261
Dec-19	1.943	1.433
Sep-19	1.951	1.368
Jun-19	2.297	1.675
Mar-19	2.996	2.314

Long-Term Solvency Ratios
Date	Total Debt
Mar-20	0.630
Dec-19	0.581
Sep-19	0.597
Jun-19	0.590
Mar-19	0.447

Answer 1

One problem observed is by passing of time debt amount increasing means company going to risk position.

And the problem in short term solvency ratio is liquidity to pay the liability is reducing by passing of time. It means company revenue reduces or at same revenue, cash payments increased that’s the reason company taking debt that why debt ratio is increasing by passage of time.

If it runs same in further company going to liquidate.

So, company has increase revenue or reduce cost then only it get out of this position.