Financial Analysis of Bmw

7.0 Ratio Analysis

Ratio analysis is the starting point in developing the information desired by the analyst. Ratio analysis provides only a single snapshot, the analysis being for one given point or period in time. In the ratio analysis, it is possible to define the company ratio with a standard one. I different ratio that can be classified as follows:

➢ Liquidity ratio

➢ Activity ratio

➢ Profitability ratio

➢ Debt-coverage ratio.

7.1 Liquidity ratio:

A liquidity ratio is a ratio that shows the relationship of a firm’s cash and other current assets to its liabilities. A “liquid firm” is one that can easily meet its short-term obligations as they come due.

7.1.1 Current Ratio:

The current ratio measures the firm’s ability to meet its short-term obligations. It indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future. It is expressed as follows:

Current Ratio = Current Asset/ Current Liability

|Current Ratio | | | | | |
| | | | | | | |
| |Current Asset | |102|183,804,896 |120,641,172 | |
| | | |,83| | | |
| | | |8,2| | | |
| | | |23 | | | |
| | | |