财务管理小论文.docx

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1、The current ratio trap (流动比率的陷井)The tradit iona I f inane i a I ana lyses norma I ly use Current Ratio and QuickRat i o to measure enterpr i se short-term so Ivency abiIity. Some enterpr i sescurrent assets reaIi zabIe ability has a lot of prob Iems. However, thecurrent ratio and quick ratio sometim

2、es IargeIy misled investors andcreditors. These kinds of error data wi I I make investors and creditors dothe wrong invest and cant recycIe the due debts. Then what reason Ieads toth i s strange phenomenon? The foI Iows are my own understand i ngs about th i sprob Iem.Current Ratio and Quick Ratio a

3、re both the index of the enterpr iseshort-term so Ivency abi Iity. Today I Focus on the part of Cur rent Ratio.As we know, Current Ratio is equaI to current assets divided by currentliabilities. Here we must know the Current assets is composed by monetaryfund, short-term i nvestments, notes rece i v

4、abIe, accounts rece i vabIe andi nventory. Norma I Iy, the higher CR the higher short-term solvency abilityand when CR equa I to two i s the best for a company. However, many goodcompanies CR i s I ess than two. How to exp lain this phenomenon? Let s I ookat this example about company ABC.Here are s

5、ome re I ated data about ABC (Assuming that a Gross sa Ie i s notzero). Cur rent Ratio = 0. 76; Sa Ies margi n= 47%; i nventory/ Current assets 二55%. Whether we can depend on the CR below 1 cone Iuded that the companysshort-term solvency have a prob Iem? I n most cases, we use enterpr i se1s cashto

6、repay the current IiabiI ities, not the current assets. But, because ofthe existence of inventory, 1 Yuan I iquid assets wi I I more than one Yuan afterits I iquidat ion. So when we use the formu I a to count Current Ratio we mustuse the current assets after its I iquidation not before its I iquidat

7、ion. Soi n this case, we shouId count cur rent ratio Ii ke this:CR = 0. 76X (155%)+0. 76X55% X1.89=1. 13202.The calculation results show that, 1 Yuan I iquid assets can repay 1.13202Yuan of current liabilities after I iquidat ion, so ABC s short-term solvencyand I iquidity has no ser ious prob I em.

8、 From the examp I e we know that thiscalculation method i s more reliable and accurate.Inventory occupies a Iarge percentage in current assets, so the currentratio wi I I have been inf Iuenced by inventory quantity in some degree. Whenthe current liabilities for a certain amount, in other current as

9、sets changesmaI I er cases, the more i nventory the higher current ratio. But the highercur rent ratio a I so cannot indicate company has stronger short-term debtabi Iity. This is because when peopIe calculation the current ratio, theyusuaI Iy use current assets incIude Inventory, but in fact because of therea I i ty company can t I iqui dat i on the ent i re i nventory. So when we calcul atethe current ratio we must pay a great attention on the inventory so that wecan have a reaI current ratio.