📖 流动性比率

Financial Statement Analysis

I. Lesson Focus

This lesson examines solvency and leverage ratios, with primary emphasis on liquidity ratios used to assess a company’s ability to meet short-term obligations. Candidates must master the calculation and interpretation of current, quick, and cash ratios, understand the cash conversion cycle, and integrate these metrics with working capital management analysis. The focus is on practical application to real financial statements, trend analysis, cross-sectional comparisons, and recognition of common distortions.

II. The Problem

A manufacturing firm reports that its current ratio has fallen from 1.8 to 1.2 and its quick ratio from 1.1 to 0.7, while days payables outstanding have lengthened from 45 to 68 days. A bank must decide whether to renew the firm’s short-term credit line, and investors are concerned about potential cash shortages or default. We need a systematic liquidity-ratio framework to determine whether short-term solvency has genuinely deteriorated, whether the issues stem from poor operating efficiency or deliberate stretching of payables, and to provide reliable inputs for credit and investment decisions.

III. Core Concepts and Calculation of Liquidity Ratios

Liquidity refers to a company’s ability to convert assets into cash quickly to satisfy short-term liabilities. Liquidity ratios are the primary tools used by short-term creditors, suppliers, and lenders.

1. Current Ratio
Formula:
$$ \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} $$

Typical acceptable range is 1.5–2.0. A ratio that is too high may indicate idle resources; too low signals liquidity pressure. Limitation: the numerator includes inventory, which may not be quickly convertible to cash at book value.

2. Quick Ratio (Acid-Test Ratio)
Formula:
$$ \text{Quick Ratio} = \frac{\text{Cash + Marketable Securities + Receivables}}{\text{Current Liabilities}} $$
Simplified version:
$$ \text{Quick Ratio} = \frac{\text{Current Assets - Inventory}}{\text{Current Liabilities}} $$

This is a stricter test because it excludes inventory. A value above 1 is often viewed as safe, but acceptable levels vary widely by industry (retailers can operate safely below 1).

3. Cash Ratio
Formula:
$$ \text{Cash Ratio} = \frac{\text{Cash + Cash Equivalents + Marketable Securities}}{\text{Current Liabilities}} $$

The most conservative liquidity measure. Normal values are low (0.2–0.5). Excessively high values suggest inefficient cash utilization.

IV. Working Capital Management and Turnover Ratios

Liquidity analysis must be linked to net working capital (NWC = Current Assets – Current Liabilities). Turnover ratios reveal the drivers behind liquidity changes.

Receivables Turnover and Days Sales Outstanding (DSO)
$$ \text{Receivables Turnover} = \frac{\text{Revenue}}{\text{Average Receivables}} $$
$$ \text{DSO} = \frac{365}{\text{Receivables Turnover}} $$

Inventory Turnover and Days Inventory on Hand (DOH)
$$ \text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} $$
$$ \text{DOH} = \frac{365}{\text{Inventory Turnover}} $$

Payables Turnover and Days Payables Outstanding (DPO)
$$ \text{Payables Turnover} = \frac{\text{Purchases}}{\text{Average Payables}} $$
$$ \text{DPO} = \frac{365}{\text{Payables Turnover}} $$

Cash Conversion Cycle (CCC)
$$ \text{CCC} = \text{DOH} + \text{DSO} - \text{DPO} $$

A shorter CCC indicates faster conversion of cash into goods, sales, and back to cash, improving liquidity.

V. Trend Analysis, Peer Comparison, and Interpretation

Single-period ratios are meaningless. Analysts must perform: - Historical trend analysis - Cross-sectional comparison against industry peers or sector averages - Evaluation in the context of the firm’s business strategy (aggressive firms may accept lower liquidity to pursue higher returns)

Liquidity must also be validated by reviewing the statement of cash flows from operating activities. Strong ratios accompanied by persistent negative operating cash flow usually signal trouble.

Worked Cases

Case 1: Basic Ratio Calculation and Interpretation

ABC Company reports the following (USD millions):
Current assets = 480 (cash 80, receivables 160, inventory 220, other 20)
Current liabilities = 320 (payables 140, short-term debt 150, accruals 30)

Calculations:
- Current ratio = 480 / 320 = 1.50
- Quick ratio = (480 – 220) / 320 = 0.81
- Cash ratio = 80 / 320 = 0.25

Interpretation: The current ratio appears acceptable, but the quick ratio below 1 indicates heavy reliance on inventory realization. Any slowdown in inventory turnover or price decline would create significant liquidity risk.

Case 2: Cash Conversion Cycle Comprehensive Analysis

XYZ Company data (USD millions):
Revenue = 25, COGS = 18
Average receivables = 2.8, average inventory = 3.2, average payables = 2.1

Calculations:
- DSO = 365 × 2.8 / 25 ≈ 40.9 days
- DOH = 365 × 3.2 / 18 ≈ 64.9 days
- DPO = 365 × 2.1 / 18 ≈ 42.6 days
- CCC = 64.9 + 40.9 – 42.6 ≈ 63.2 days

Compared with the prior year’s CCC of 48 days, the 15-day lengthening is driven mainly by slower inventory turnover. Management must investigate whether this reflects declining demand or over-purchasing; otherwise liquidity will continue to deteriorate.

Case 3: Trend Analysis and Decision Scenario

Company A liquidity metrics over three years:

Days payables have risen from 38 to 62. Analysis: The company is stretching suppliers to “manufacture” liquidity. This tactic is unsustainable. Suppliers may demand cash-on-delivery or raise prices, ultimately damaging creditworthiness and long-term liquidity. A bank deciding on loan renewal should require concrete plans to improve inventory management and receivables collection.

Traps

Key Formulas

• Current Ratio = Current Assets / Current Liabilities
• Quick Ratio = (Current Assets – Inventory) / Current Liabilities
• Cash Ratio = (Cash + Marketable Securities) / Current Liabilities
• Receivables Turnover = Revenue / Average Receivables
  DSO = 365 / Receivables Turnover
• Inventory Turnover = COGS / Average Inventory
  DOH = 365 / Inventory Turnover
• Payables Turnover = Purchases / Average Payables
  DPO = 365 / Payables Turnover
• Cash Conversion Cycle = DOH + DSO – DPO
• Net Working Capital = Current Assets – Current Liabilities

Practice Questions

Q1. A company has current assets of $6.5 million, inventory of $1.8 million, and current liabilities of $4.0 million. Its quick ratio is closest to:
A. 1.18 B. 1.63 C. 0.63 D. 1.175

Q2. Which of the following is typically excluded from quick assets?
A. Trading securities B. Accounts receivable C. Prepaid rent D. Cash equivalents

Q3. If a company’s cash conversion cycle shortens from 35 days to 22 days, the most likely result is:
A. Deterioration in liquidity B. Improvement in liquidity C. Large increase in payables D. Inventory reduction causing lost sales

Q4. A firm reports a current ratio of 1.8 and a quick ratio of 0.9. Inventory constitutes 40% of current assets. The cash ratio is closest to:
A. 0.18 B. 0.36 C. 0.54 D. 0.72

Q5. When benchmarking, a company shows a current ratio above the industry average yet reports persistently negative cash flow from operations. The most likely explanation is:
A. Accelerated collection of receivables B. Substantial buildup of slow-moving inventory C. Abnormally fast payables turnover D. Increased capital expenditure

Q6. Which statement about the cash ratio is most accurate?
A. A higher cash ratio is always better B. The cash ratio is normally higher than the quick ratio C. The cash ratio is the best measure of liquidity under extreme stress D. All industries should target a cash ratio above 0.5

Q7. A company had revenue of $40 million and average receivables of $5 million. Days sales outstanding is closest to:
A. 45.6 days B. 50.0 days C. 73.0 days D. 80.0 days

Q8. A company deliberately extends its days payables to twice the industry average. This action is most likely to:
A. Improve liquidity ratios sustainably B. Improve short-term liquidity metrics while damaging long-term credit standing C. Shorten the cash conversion cycle D. Significantly increase inventory turnover

Answers

Takeaways

• The three core liquidity ratios (current, quick, cash) increase in conservatism and should be used together.
• The cash conversion cycle links the balance sheet and income statement; lengthening CCC usually signals declining liquidity.
• Turnover ratios must use average balance-sheet figures to avoid distortion.
• Industry norms differ dramatically; universal numerical benchmarks are dangerous.
• Ratio analysis is incomplete without the cash-flow statement and trend analysis.
• Deliberate extension of payables is a common but unsustainable way to improve reported liquidity; analysts must remain alert to this manipulation.