“QUICK RATIO”
By Yulia Asrida
3A/D4
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
b.Technical Analysis
Quick Ratio
Definition of Quick Ratio is an indicator of short term’s liquidity. The quick ratio measures a company’s ability to meet its short-terms obligation with its most liquid assets. The higher the quick the ratio, the better the position of the company.
The Explanation of the Quick Ratio
The Quick Ratio is more conservative than the current ratio, a more well known liquidity measure, because it exludes inventory from current asset.
Inventory is excluded because some companies have difficulty turning their inventory in to cash in the event that short-term obligation need to be paid off immediately, there are situations in which the current ratio would overestimate a company’s short-term financial strength.
Element Of Quick 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.
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 RP1,3 current assets.
• PT. Tower Bersama is in not liquid condition because the safety margin less than 1
