Current ratio is the ratio of current assets to current liabilities of an enterprise. Its calculation formula is as follows: current ratio = current assets/current liabilities?
The current ratio is an important financial index to measure the short-term solvency of enterprises. The higher the ratio, the stronger the ability of enterprises to repay short-term liabilities, and the greater the guarantee of repaying current liabilities. However, the excessive flow rate is not a good phenomenon.
Because the higher the current ratio, it may be that the enterprise has too much funds stranded in the current assets, which can not be effectively used, which may affect the acquisition ability of the enterprise.
2, quick ratio
Quick ratio is the ratio of quick assets to current liabilities of an enterprise. The calculation formula of quick ratio is: quick ratio = quick assets ÷ current liabilities = (current assets-inventory) ÷ current liabilities.
The current ratio has some limitations in evaluating the short-term solvency of enterprises. If the current ratio is high, but the liquidity of current assets is poor, the short-term solvency of enterprises is still not strong.
In current assets, inventory needs to be sold before it is converted into cash. If the inventory is unsalable, its realization becomes a problem. Generally speaking, current assets are called quick assets after deducting inventory.
3. Bank cash reserve ratio
Cash ratio is the ratio of cash assets to current liabilities of an enterprise. The calculation formula of cash ratio is: cash ratio = cash assets ÷ current liabilities = (monetary funds+securities or short-term investments) ÷ current liabilities = (quick assets-accounts receivable) ÷ current liabilities.
Cash assets include monetary funds owned by enterprises and securities held (short-term investments in balance sheets). It is the balance of quick assets after deducting accounts receivable. Due to the possibility of bad debt losses in accounts receivable,
Some accounts due may not be recovered on time, so the amount calculated after deducting accounts receivable from quick assets can best reflect the ability of enterprises to pay current liabilities directly.
Although the cash ratio can best reflect the ability of enterprises to directly repay current liabilities, the higher the ratio, the stronger the solvency of enterprises. However, if the enterprise stays in too many cash assets and the cash ratio is too high, it means that the current liabilities of the enterprise are not used reasonably, and are often maintained by cash assets with low acquisition ability, which will lead to an increase in the opportunity cost of the enterprise.
Extended data
The analysis of short-term solvency mainly includes peer comparison, historical comparison and budget comparison of current ratio.
I. Comparison with peers
Peer comparison includes peer advanced level, peer average level and competitor comparison. Their principles are the same, but the comparison standards are different.
Peer comparative analysis has two important premises: one is how to determine similar enterprises, and the other is how to determine industry standards. The peer comparison procedure of short-term solvency is as follows:
1. First, calculate the core index reflecting the short-term solvency-liquidity ratio, and compare the actual index value with the industry standard value to draw a comparative conclusion.
2, the decomposition of current assets, the purpose is to examine the quality of the current ratio.
3. If the inventory turnover rate is low, you can further calculate the quick ratio, investigate the level and quality of the quick ratio of the enterprise, and compare it with the industry standard value to draw a conclusion.
4. If the quick ratio is lower than the level of the same industry, it means that the turnover rate of accounts receivable is slow, and the cash ratio can be further calculated and compared with the industry standard value to draw a conclusion.
5. Finally, through the above comparison, comprehensively evaluate the short-term solvency of the enterprise.
Second, historical comparison.
The historical comparative analysis of short-term solvency adopts the comparison standard of the actual index value of short-term solvency at a certain point in the past. The comparison standard can be the best level in the history of an enterprise or the actual value under the normal operating conditions of an enterprise. In the analysis, it is often compared with the actual indicators of the previous year.
Advantages of historical comparative analysis:
1, the comparative foundation is reliable, and the historical index is the level reached by the enterprise. By comparison, we can observe the changing trend of enterprise's solvency;
2, with strong comparability, easy to find problems.
Its shortcomings: first, historical indicators can only represent the actual level in the past, but not the reasonable level. Therefore, historical comparative analysis mainly reveals differences, analyzes reasons and infers trends through comparison; Second, after the business environment changes, it will also weaken the comparability of historical comparison.
Third, budget comparison.
Comparative analysis of budget refers to the comparative analysis of the actual value and budget value of enterprise indicators in this period. The comparison standard adopted in budget comparative analysis is the budget standard reflecting the solvency of enterprises. Budget standard is the goal that enterprises set according to their own operating conditions and conditions.
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