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Analysis of Hinopak

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| | | | | | | | | | | FINANCIAL STATEMENT ANALYSIS FOR HINOPAK MOTORS (2010) | | | | | | | | | | Financial statement analysis (or financial analysis) the process of understanding the risk and profitability of a firm (business, sub-business or project) through analysis of reported financial information, particularly annual and quarterly reports. Financial statement ratio analysis focuses on three key aspects of a business: liquidity, profitability, and solvency. | | | | | | | | | | Note: Figures in table are in thousand (000)LIQUIDITY RATIOSLiquidity ratios measure the ability of a company to repay its short-term debts and meet unexpected cash needs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Current Ratios:Formula:Current Ratio = Current Assets / Current Liabilities | | | | | | | | | | Year | 2010 | | | | | | | | | Current Assets | 4793.61 | | | | | | | | | Current Liabilities | 3885.81 | | | | | | | | | Current Ratio | 1.233619245 | | | | | | | | | | | | | | | | | | | The current ratio is also called the working capital ratio, as working capital is the difference between current assets and current liabilities. This ratio measures the ability of a company to pay its current obligations using current assets. The current ratio is calculated by dividing current assets by current liabilities.This ratio indicates the company has more current assets than current liabilities. Hinopak’s current ratio is 1.23 which indicates that there are 1 rupee and 23 paisas of current assets available to meet each 1 rupee of currently maturing obligations. Different industries have different levels of expected liquidity. Whether the ratio is considered adequate coverage depends on the type of business, the

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