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  • Short - Term Solvency or Liquidity Ratio: Current Ratio Company / Year 2008 2009 2010 Average

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    Zakiah Abu Kasim
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    The document discusses three ratios used to analyze a company's short-term and long-term solvency: the current ratio, quick ratio, and cash ratio are used to measure short-term solvency by comparing current assets to current liabilities; the total debt ratio measures long-term solvency by comparing total debt to total assets. Tables show the ratios for two companies, Copeng Berhad and Dutaland Bhd, over three years, with averages calculated to compare short and long-term financial stability between the companies.

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    Titolo originale

    Quiz 1

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    The document discusses three ratios used to analyze a company's short-term and long-term solvency: the current ratio, quick ratio, and cash ratio are used to measure short-term solvency by comparing current assets to current liabilities; the total debt ratio measures long-term solvency by comparing total debt to total assets. Tables show the ratios for two companies, Copeng Berhad and Dutaland Bhd, over three years, with averages calculated to compare short and long-term financial stability between the companies.

    Copyright:

    © All Rights Reserved
    Scarica in formato DOCX, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    28 visualizzazioni2 pagine

    Short - Term Solvency or Liquidity Ratio: Current Ratio Company / Year 2008 2009 2010 Average

    Caricato da

    Zakiah Abu Kasim
    The document discusses three ratios used to analyze a company's short-term and long-term solvency: the current ratio, quick ratio, and cash ratio are used to measure short-term solvency by comparing current assets to current liabilities; the total debt ratio measures long-term solvency by comparing total debt to total assets. Tables show the ratios for two companies, Copeng Berhad and Dutaland Bhd, over three years, with averages calculated to compare short and long-term financial stability between the companies.

    Copyright:

    © All Rights Reserved
    Scarica in formato DOCX, PDF, TXT o leggi online su Scribd
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    di 2

    Short Term Solvency or Liquidity Ratio

    I.

    Current ratio
    Current assets
    Current liabilities

    Current ratio =

    Company / Year
    Copeng Berhad
    Dutaland Bhd

    II.

    2010
    6.52
    3.31

    Average
    2.55
    3.53

    Quick (or Acid-Test) Ratio


    Current assets - Inventories
    Current liabilities

    Quick
    ratio =

    Company / Year
    Copeng Berhad
    Dutaland Bhd

    III.

    Current Ratio
    2008 2009
    0.65 0.48
    3.82 3.45

    Quick Ratio
    2008 2009
    0.57 0.47
    0.91 0.61

    2010
    6.47
    0.88

    Average
    2.50
    0.80

    Quick (or Acid-Test) Ratio


    Cash Ratio =

    Company / Year
    Copeng Berhad
    Dutaland Bhd

    Cash
    Current liabilities

    Cash Ratio
    2008 2009
    0.48 0.39
    0.36 0.14

    2010
    6.28
    0.10

    Average
    2.38
    0.20

    LongTerm Solvency or Financial Leverage


    I.

    Total Debt Ratio


    Total assets -Total equity
    Total assets

    Total debt ratio =

    Total debt to equity ratio


    Company / Year
    Copeng Berhad
    Dutaland Bhd

    2008
    13.72
    70.60

    2009
    11.45
    59.38

    2010
    12.13
    53.86

    Average
    12.43
    61.28

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