Reasons for the decline of Yili 20 19 cash ratio

Current ratio. Current ratio reflects the ratio of current assets to current liabilities of an enterprise in a certain period. The current ratio measures the short-term solvency of an enterprise and evaluates its solvency. It is equal to the ratio of current assets to current liabilities. From the financial statements of Yili from 2007 to the first quarter of 2009, the debt repayment current ratio of Yili in these three years was calculated. 2007: 0.91.2008: 0.66. the first quarter of 2009: 0.69. Yili's low current ratio indicates that its short-term solvency is weak. Affected by the melamine incident in 2008, the increase in liabilities was greater than the increase in assets. From the composition of current assets, Yili's working capital and inventory account for about 74% of current assets, accounting for about 37% respectively, with a high proportion of prepayments and good quality and structure of current assets. Calculated by the three-year current ratio, it will not exceed 100% within three years, so the current assets can't repay the current liabilities, and there are financial risks.