Liquidity

Current Ratio
The current ratio is a financial ratio helps investors and creditors examine the liquidity
of a company and how easily that company will be able to pay off its current
liabilities (debt and payables). This ratio expresses a firm's current debt in terms of
current assets. The current ratio is calculated by dividing current assets by current
liabilities. A higher current ratio is always more favorable than a lower current ratio
because it shows the company can more easily make current debt payments. The
current ratio also sheds light on the overall debt burden of the company.
Current ratio of the Proton company is decreasing year by year. This is because the
current debt of the Proton is increasing year by year and the company isn't making
enough from operations to support activities. In other words, the company is losing
money. This will cause Proton suffer in cash flow.
Quick Ratio
The quick ratio is to measures the liquidity of a company whether its ability to pay off
its current liabilities with quick assets. For example, if the firm has enough quick
assets to cover its total current liabilities, the firm will be able to pay off its
obligations without having to sell off any long-term or capital assets. Normally
businesses will use their long-term asset to generate revenue. If the company selling
off these capital assets, it shows current operations of the company arent making
enough profit to pay off current liabilities
Higher quick ratios are more favorable for companies because it shows there are more
quick assets than current liabilities. For example, if a company with a quick ratio of 1
indicates that quick assets equal current assets. Obviously, as the ratio increases so
does the liquidity of the company. More assets will be easily converted into cash if
need be. This is a good sign for investors, but an even better sign to creditors because
creditors want to know they will be paid back on time.
Quick ratio of the Proton company is decrease 4% between 2007 to 2011. This is
because the current debt of the Proton is increasing year by year and the company isn't
making enough from operations to support activities. In other words, the company is
losing money. This will cause Proton suffer in cash flow.

Leverage
Debt-to-total asset ratio
Analysts, investors, and creditors use this measurement to evaluate the overall risk of
a company. Companies with a higher figure are considered more risky to invest in and
loan to because they are more leveraged. This means that a company with a higher
measurement will have to pay out a greater percentage of its profits in principle and
interest payments than a company of the same size with a lower ratio. Thus, lower is
always better.
DTA of Proton company is increasing 5% between 2007 to 2011 and it is less than 1
shows that it has more assets than liabilities and could pay off its obligations by
selling its assets if it needed to. This mean Proton is least risk company. Proton
company purchase good and service from PEPS-JV (M) Sdn Bhd, Technomeiji
Rubber Industries Sdn. Bhd. and Aluminium Alloy Industries Sdn. Bhd. Three of the
company. Three of the companies have relationship with Proton company which is
equity investment relationship.
Debt-to-equity ratio
Each industry has different debt to equity ratio benchmarks, as some industries tend to
use more debt financing than others. When calculating the profitability of a business,
it is essential to know the amount of debt a company has to pay. That's why this ratio
is so important. It allows a company to measure how much money it can safely
borrow over a long period of time.
Debt to equity ratio of the Proton company increase 9% between 2007 to 2011
because the debt of the company increase. The debt of proton increase because its
borrow loan from the government for produce new model of cars but Proton company
still consider lower debt to equity ratio company implied a more financially stable
business.
Long term debt to equity ratio of the Proton company is decrease 3 between 2007 to
2011. This is because long term debt of the Proton is decrease. Besides, key success
decreases the long term debt by Proton because use the technology from Lotus which
is acquired by Proton in 1996 and reduce its reliance on Mitsubishi.

Liquidity
Current Ratio

Current Ratio
2.5
2
1.5
1
0.5
0
2007

2008

2009

2010

2011

Current Ratio

Quick Ratio

Quick Ratio
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

2007

2008

2009
Quick Ratio

2010

2011

Leverage
Debt to total asset ratio

Debt to total asset ratio

0.3
0.29
0.28
0.27
0.26
0.25
0.24
0.23
0.22
2007

2008

2009

2010

2011

Debt to total asset ratio

Debt to equity Ratio

Debt to equity Ratio

0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2007

2008
Debt to equity ratio

2009

2010

Long term debt to equity ratio

2011