CURRENT
RATIO
What
Is Financial Statement?
Financial statement is a report that show financial activities of the
company. Analysis is the process of breaking a complex topic or
substance into smaller parts to gain a better understanding of it. So, Financial Statement analysis is the Process to understand financial activities
from Financial statements and use to generate estimates and conclusions useful
in conducting our business activities.
Ratio
Analysis of financial Statement
1. Liquidity
a.
Current ratio
b.
Quick ratio or acid test
ratio
c.
Cash ratio
d.
Cash flow liquidity ratio
2. Solvability
a.
Financial
leverage ratio
b.
Total debt to total capital ratio
c.
Total debt to equity capital ratio
d.
Long-term debt to equity capital
e.
Short-term debt to total debt
3. Profitability
a.
Cost
of goods sold analysis
b.
ROIC
c.
ROA
or ROI
d.
ROCE
e.
Cash return on assets
4. Cash Flow
a.
Operating
CF to current liabilities
b.
Operating
CF to total liabilities
c.
Operating
CF to total assets
d.
Cash
flow adequacy ratio
e.
Cash reinvestment ratio
5. Risk
6. Bankruptcy prediction
a. Univariat
b. Multivariat Z-Score
c. Mulivariat Ohlson
(logit)
7. Securities
a.
Fundamental
analysis
Technical Analysis
Current Ratio
The current ratio is a financial ratio that
measures whether or not a firm has enough resources to pay its debts over the
next 12 months. It compares a firm's current assets to its current liabilities.
safety
margin here is the percentage of remaining current assets remaining after
payment of all current liabilities
Element
Of Current Asset
• Cash and cash equivalents is ready money that can be used operations. Cash equivalents are assets that are
readily convertible into cash
• Short-term Investments are investments that are readily availed
within a period of less than 1 year
• Account Receivable is rights the company in the form of cash
and will be owned in less than 1 year
• Inventories are goods held for sale or processing company
back
• prepaid expenses is expense paid in advance
but which has not yet been incurred so is recognized as an asset
Current Liabilities
current liabilities are often mean as all liabilities of the business to
be settled in cash within the one fiscal year or one operating cycle of a given
firm.
Objective of
current Ratio
Current ratio is used to measure how much collateral asset that belongs
to the company to repay short-term debt
1. Companies said Liquid if Current Asset more
than Current liabilities and the safety margin more than 1.
2. Companies said Liquid if Current Liabilities
more than Current asset and the safety margin less than 1.
Case Study
Conclusion
From the previous case study, it can be
concluded that the
•
Financial
PT.Tower Bersama in 2011 showed that for every Rp 1 current liabilities
guaranteed by RP1,6 current assets.
•
Pt .
Tower Bersama is in not liquid condition because the safety margin less than 1