Analysis of Securities

4.1.3. Cash Ratio

The cash ratio is estimate to current liabilities into cash. It betoken the company can pay

off it current liabilities given year from its operation.(Kieso, Weygandt,Warfield ,2001).It

is the most famous ratio for realize the liquidity position of any company. Generally we

know that current ratio and quick ratio is not good way to analysis the liquidity position

for a company because it correspond of account receivable and inventory, which take

time to convert to cash..Finally we can express that the cash ratio gives a better result.

The formula of current ratio is below as;

Cash Ratio = Cash / Current Liabilities

(1) (2)

Table: 4.1.3 Cash ratio

Year Beximco Pharmaceuticals Ltd

Square Pharmaceuticals Ltd.

(Ratio)

(Ratio)

2008 (1)

73,647,728

------------------ = 0.028

2,602,032,267

205,295,694

------------------- = 0.058

3,500,845,103

(2)

2007 (1)

85,698,910

------------------- = 0.052

1,627,972,936

139,855,179

------------------ = 0.054

2,555,566,286

(2)

Analysis: In this r atio, we can analysis that the ratio has decrease few times in Beximco

pharmaceutical company in year 2007 to 2008.On contrast; square pharmaceutical

company has increased f ew. For this reason both companies are holding its cash, which is

not good from investor points of view. Current liabilities have increase for both

companies. So those companies need increase invest, that s way both company to get

money for good return.

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4.2. Asset management ratio

Asset management ratios are most notable ratio of the financial ratios analysis. It measure...