In order to better check the real financial position of Yunnan Baiyao Group Co. we have examine their financial statements for the years leading up to 2003. In the abstract we have used various proportionalitys to help us decide this. The ratios be broken down by ratio casing with analysis over the four years of data that was given. all(prenominal) ratio is calculated and following those calculations there is a unequal explanation discussing the importance.
Liquidity proportions [Exhibit 1.2]
Year1999200020012002
MHOMHOMHOMHO
Current Ratio1.552.731.240.791.531.201.590.79
Quick Ratio 0.942.320.720.500.960.911.060.60
The live ratio, as we know the functional capital ratio or the real ratio, refers to the enterprise of current assets to current liabilities ratio. The current ratio and fond ratio ar indicators that reflect the corporations short solvency.
Generally speaking, if these ii ratio are higher its means the corporation has stronger liquidity of the corporate assets and that short-term solvency is also stronger. Typically, the current ratio should be to a greater extent than 2:1, and the quick ratio should be more than 1:1in normal circumstances.
As shown above, the Yunnan Baiyao Group Co.
s current ratio of intermingle are very stabile besides lower than the normal standard (2:1). The current ratio and quick ratio of head office are floating. If the quick ratio is too low it can augment the risk of short-term debt. If the quick ratio is too high, liquid assets take up too much money and thus will increase the opportunity cost of business investment.
Leverage Ratios [Exhibit 1.2]
Year1999200020012002
MHOMHOMHOMHO
Debt Ratio0.460.120.460.170.440.190.410.19
D/E Ratio 0.940.130.940.210.890.240.800.24
As shown above, when feeling at the debt ratio, since all the debt ratios are stabile, and for merge company the ratios are above 0.4, we can assume that Yunnan Baiyao Group Co.s merge is...If you want to get a full essay, order it on our website: Ordercustompaper.com
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