Ratio Premier Bank

The quick ratio is more well-known liquidity measure, because it excludes inventory from current assets. Inventory is excluded because some companies have difficulty turning their inventory into cash. In the event that short-term obligations need to be paid off immediately, there are situations in which the current ratio would overestimate a company's short-term financial strength.

From the chart we can see that quick ratio decrease from 0.0181 to 0.161 in 2008 from 2007 because the company had used more short term bank loan in 2008. They have used TK 2,669,693,184 bank loan rather they have used TK 1,818,777,878 in 2007. But in 2009 the quick ration increased significantly due to decrease in their short term bank loan. They have used only TK 1,534,345,782 in 2009. This period they have used their own fund. In 2010 their quick ratio again decrease again because another reduction of the use of short term loan and they used only TK 736,443,848.In 2011 their quick ratio decreased because again they use a big amount of short tem bank loan. It increased to TK 2,627,483,864.

Current ration is the measure of how much the company is capable to meet their current liabilities with its current assets. The higher the current ration the company is more capable to pay back their short term liabilities.

The current ratio of the company decreased in 2008 from 2007. That means it had reduced its capacity to payback their short term liabilities with their current asset. It occurs due to increase the use of short term bank loan rather than use company's own cash. In 2009 the ratio increases because they have reduced their use of loan. We can see in their balance sheet that their current asset decreases in 2009 from 2008. Beside that their current liabilities also decrease significantly. This help them became more capable to pay back their short term debts. In 2010 company's current ratio increases in huge. This occurs due to significant increase in their inventory level and also decrease in the use of short term bank loan. At 2011 their current ratio decrease very sharply cause again they have used huge amount of short term bank loan. But their inventory is increased but their short term loan used more than that.