I. Short-term solvency indicators:
To analyze the short-term solvency of enterprises, we can usually use a series of indicators to reflect the short-term solvency. From the meaning and influencing factors of short-term solvency of enterprises, we can know that short-term solvency can be obtained mainly by comparing current assets and current liabilities of enterprises. Therefore, the indicators of short-term solvency of enterprises can be compared with current liabilities and current assets, including working capital, current ratio, quick ratio, cash ratio and payment capacity coefficient of enterprises.
1. Working capital
Working capital refers to the difference between current assets and current liabilities, also known as net working capital, indicating how much surplus the current assets of an enterprise have after paying off all current liabilities. Its calculation formula is
Working capital = current assets-current liabilities
2. Current ratio
Current ratio refers to the ratio of current assets to current liabilities, indicating how much current assets are used as repayment guarantee for each yuan of current liabilities. Its calculation formula is as follows.
Current ratio = current assets X 100%
3. Quick ratio
Quick ratio, also known as acid measurement ratio, refers to the ratio of quick assets to current liabilities of an enterprise, which is used to measure the ability of realizing quick assets and paying current liabilities. Its calculation formula is as follows.
Quick ratio = quick assets
4. Bank cash reserve ratio
Cash ratio refers to the ratio of cash assets to current liabilities and can be expressed in the following two ways.
(1) Cash assets only refer to monetary funds.
When cash assets only refer to monetary funds, the calculation formula of cash ratio is as follows.
Cash ratio = monetary fund X 100%
(2) Cash assets include monetary funds and cash equivalents.
When cash assets include not only monetary funds, but also cash equivalents, that is, investments held by enterprises with short term, strong liquidity, easy conversion into known cash and little risk of value change, they are regarded as cash equivalents. According to this understanding, the calculation formula of cash ratio is as follows.
Cash ratio = monetary fund+cash equivalent X 100%
5. Coefficient of enterprise's ability to pay
The coefficient of enterprise's ability to pay is an important indicator reflecting the short-term solvency of enterprises. According to the specific time difference reflected by the enterprise's payment ability, the payment ability coefficient can be divided into two types: the final payment ability coefficient and the recent payment ability coefficient. The final payment ability coefficient refers to the ratio of the amount of monetary funds to the amount of urgent payment at the end of the period. Its calculation formula is as follows.
Final capacity to pay coefficient = final monetary fund
6. Analysis of auxiliary indicators reflecting the short-term solvency of enterprises
1) Comparative Analysis of Accounts Receivable Turnover and Accounts Payable Turnover
Generally speaking, the faster the turnover rate of accounts receivable, the faster the enterprise collects money, and the less the collection cost and bad debt loss; At the same time, it also shows that the current assets of the enterprise are highly liquid and have strong solvency. If accounts receivable account for a large proportion of current assets, even if the current ratio and quick ratio are high, its short-term solvency is still in doubt and needs further analysis. Generally speaking, the higher the turnover rate of accounts receivable, the shorter the average collection period and the faster the collection of accounts receivable; Otherwise, the working capital of an enterprise will be too sluggish in accounts receivable, which will affect the normal capital operation. The purpose of purchasing materials and other materials by enterprises is to manufacture products through the processing of enterprises, and then recover cash through sales to realize value appreciation. In this sense, the accounts payable arising from purchasing goods on credit should be paid by the cash recovered from selling goods on credit. In terms of capital turnover, the two are closely related to the capital turnover period and must cooperate with each other. This relationship between accounts receivable and accounts payable has the following effects on the short-term solvency of enterprises.
(1) The turnover periods of accounts receivable and accounts payable are the same.
In this case, the cash recovered from the goods sold on credit can just meet the debts arising from the credit purchase business, and it is not necessary to repay them with other current assets. The short-term solvency index of an enterprise will not change because of the existence of accounts receivable and accounts payable.
(2) The turnover rate of accounts receivable is faster than that of accounts payable.
Assume that the average collection period of enterprise accounts receivable is 30 days, while the average payment period of accounts payable is 60 days. In this case, the current ratio of the enterprise will decrease, and the static short-term solvency of the enterprise reflected by the current ratio will be relatively poor. However, due to the fast turnover rate of accounts receivable in current assets and the slow turnover rate of accounts payable in current liabilities, from a dynamic point of view, the actual solvency of enterprises is strong, because enterprises only pay cash to pay accounts payable once when collecting accounts receivable twice.
(3) The turnover rate of accounts receivable is lower than that of accounts payable.
Assuming that the average collection period of accounts receivable is 60 days and the average payment period of accounts payable is 30 days, then in this case, the current ratio of enterprises will increase, and the static short-term solvency of enterprises reflected by the current ratio will be stronger. From a dynamic point of view, the actual short-term solvency of enterprises is lower than the short-term solvency level expressed by current ratio. This is because whenever an enterprise converts the accounts receivable generated by selling goods on credit into a sum of cash, it has to pay two cash payments to pay the accounts payable generated by the business of buying goods on credit. In this way, only by using other current assets can the debts formed by buying goods on credit be paid on time. The above only analyzes the turnover speed of accounts receivable and accounts payable. When their scales are different, the impact of different turnover rates on short-term solvency will be relatively enhanced or weakened. This comparison can be made not only on the corresponding items of current assets and current liabilities, but also on the whole, because the short-term solvency analysis itself is based on the relationship between current assets and current liabilities.
2) Inventory turnover rate analysis
As far as general enterprises are concerned, inventory accounts for a considerable proportion of current assets. Although inventory cannot be directly used to repay current liabilities, if the inventory of an enterprise is realized quickly, it means that the liquidity of assets is good and there will be a large cash flow injected into the enterprise in the future. The purpose of enterprises investing in inventory is to make profits through inventory sales. In order to meet the needs of sales, general manufacturing enterprises should keep a considerable amount of inventory. Inventory is very sensitive to changes in business activities, which requires enterprises to control inventory at a certain level to keep it basically consistent with business activities. Therefore, when analyzing the short-term solvency of enterprises, we must consider the speed of realizing inventory. Inventory turnover rate is a comprehensive index to measure and evaluate the operating conditions of enterprises in purchasing inventory, putting into production and sales recovery. Generally speaking, in the case of a certain sales scale, the faster the inventory turnover rate, the lower the inventory occupation level, the stronger the liquidity, and the faster the inventory is converted into cash and accounts receivable; Conversely, the slower the inventory turnover rate. The purpose of inventory turnover analysis is to find out the problems existing in inventory management from different angles and links, so that inventory management can ensure the continuity of production and operation while occupying as little liquidity as possible, thus improving the efficiency of the use of liquidity, enhancing the short-term solvency of enterprises and promoting the improvement of inventory management level of enterprises. It should be pointed out that when analyzing the short-term solvency, we can't draw a conclusion based on a certain index in isolation, but we should combine all the indexes according to the purpose and requirements of the analysis and the actual situation of the enterprise in order to draw a correct conclusion.
Two. Long-term solvency index
Long-term solvency refers to the ability of enterprises to repay long-term liabilities. There are two main indicators to measure the long-term solvency of enterprises: asset-liability ratio and property right ratio.
(1) Asset-liability ratio
Asset-liability ratio, also known as debt ratio, refers to the ratio of total liabilities to total assets of an enterprise. It shows the proportion of funds provided by creditors in the total assets of the enterprise and the degree of protection of creditor's rights and interests by enterprise assets. Its calculation formula is asset-liability ratio (also called debt ratio) = total liabilities/total assets ×l00%.
In general, the smaller the asset-liability ratio, the stronger the long-term solvency of enterprises.
The conservative view is that the asset-liability ratio should not be higher than 50%, while the international general view is that the asset-liability ratio is equal to 60%.
③ As far as creditors are concerned, the smaller the index, the better; From the perspective of business owners, the index is too small, indicating that financial leverage is not used enough; The business decision-makers of enterprises should combine the indicators of solvency and profitability for analysis.
(2) Proportion of property rights
The ratio of property rights refers to the ratio of the total liabilities of an enterprise to the total owners' equity, which is an important symbol of whether the financial structure of an enterprise is stable, also known as the capital-debt ratio. It reflects the extent to which the rights and interests of enterprise owners protect the rights and interests of creditors. Its calculation formula is:
Property right ratio = total liabilities/total owner's equity ×l00%
Under normal circumstances, the lower the proportion of property rights, the stronger the long-term solvency of enterprises, the higher the degree of protection of creditors' rights and interests, and the smaller the risks they bear, but enterprises cannot give full play to the financial leverage effect of liabilities. Therefore, when evaluating whether the proportion of property rights is appropriate, enterprises should comprehensively carry out profitability and enhance solvency, that is, on the premise of ensuring the safety of debt repayment, increase the proportion of property rights as much as possible.
Solvency refers to the ability of an enterprise to repay its due debts (including principal and interest). Whether the due debts can be repaid in time is an important symbol reflecting the financial situation of enterprises. Through the analysis of solvency, we can examine the ability and risk of sustainable operation of enterprises and help to predict the future income of enterprises. The solvency of an enterprise includes short-term solvency and long-term solvency.