Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Business analysis of China Changcai Company
no enough ability to cover its liabilities from liquid assets.
For the cash ratio and operating cash flow ratio of first quarter in 2003, the number is only for the quarterly, if we time 4 and transfer it to yearly, the number should be 101.6% and 11.95%, and it¡¯s really a big improvement for the company¡¯s liquidity capability compared with prior years.
Solvency Analysis
¡¡ Note First quarterly in 2003 2002 2001 2000 1999
Liabilities to equity 1.72 2.06 1.34 1.09 1.29
Debt to equity 0.64 0.90 0.60 0.46 0.47
Net debt to equity 0.23 0.39 0.34 0.30 0.27
Debt to capital 0.52 0.65 0.45 0.35 0.37
Net debt to net capital 1.00 0.99 0.99 0.99 0.98
Interest coverage (earning based) 2.92 -11.31 -9.72 1.18 1.87
FINANCIAL ANALYSIS
The interest coverage presented negative in 2001 and 2002. It indicated that Changchai was disable to covering its interest expense through its operating actives. This is a risky signal. Fortunately, the company¡¯s solvency capability is improved in 2003 first quarter. But the overall capability of solvency is not too good.
Sustainable Growth Rate Analysis
¡¡ Note First quarterly in 2003 2002 2001 2000 1999
ROE 2.92% -71.17% -35.22% 0.69% 1.14%
Dividend payout ratio 0.00% 0.00% 0.00% 0.00% 0.00%
Sustainable growth rate ¡¡ 2.92% -71.17% -35.22% 0.69% [next page]