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3.0 Financial Analysis (Quantitative Analysis)
To evaluate PROTON’s financial performance, we conduct a financial ratio analysis based on the information given in the Balance Sheet as at 31st March and Income Statements for years ended 31st March.
i) Liquidity Ratio
• Current ratio = Current asset Current liability
2009 2008 2007 2006 2005
1.807 2.102 2.064 1.893 2.274

The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities.
PROTON’s current ratio shows a declining from year 2005 to year 2009. This means that, the company’s assets is in a risk which they may not be able to afford company’s liabilities. In 2005 the ratio shows that PROTON can pay its current liabilities from its current assets 2.274 over. But the figure decline in 2009 which they can only pay its current liabilities from its current assets 1.807 over. This result from PROTON’s assets which is decreasing from RM 5026.5 million in 2005 to RM 3404.6 million in 2009 and their liabilities is also decreasing from RM 2.274 million in 2005 to RM 1.807 million in 2009.
• Quick ratio = Current asset – Inventory Current liability
2009 2008 2007 2006 2005
1.067 1.431 1.233 1.299 1.837

The quick ratio is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The quick ratio is more conservative than the current ratio because it excludes inventory and other current assets, which are more difficult to turn into cash. Therefore, a higher ratio means a more liquid current position.
PROTON’s quick ratio is declining from year 2005 to year 2009 which means that the company’s assets is in a high risk that it may not be

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