Current Ratio 2011

Current Assets

Current Liabilities

35,343,809

35,774,652 =0.99 The ratio of 0.99: 1 means that for every ringgit of current liabilities, Hwa Tai has RM0.99 of current assets.

Current Ratio 2010

Current Assets

Current Liabilities

36,746,539

37,634,489 =0.98

* The ratio of 0.98 : 1 means that for every ringgit of current liabilities, Hwa Tai has RM0.98 of current assets.

Acid Test ratio * This indicator to determine whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. The acid-test ratio is far more strenuous than the working capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets.

Acid Test Ratio 2011

Cash + Short Term Investment + Receivables (Net) Current Liabilities

28,530,006

35,774,652 = 0.80

Acid Test Ratio 2010

Cash + Short Term Investment + Receivables (Net) Current Liabilities

31,403,261

37,634,489 = 0.83 * Acid test ratio for the respective three years shows that Hwa Tai always gain less than 1 ratio. Its shows that this company cannot pay their current liabilities and should be looked at with extreme caution. This acid test ratio is much lower compare to current ratio, it means the current assets for this company in highly dependent on inventory.

Receivable Turnover * This ratio measure used to quantify a firm's effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets.

Receivables Turnover 2011

Net Credit Sales Average Net Receivables

77,016,224

25,424,055 = 3.03

= 3.03 times

Average collection period 2011

365 days Receivables Turnover

365