The current ratio is used to measure the ability of corporate liquid assets to become cash for repaying liabilities before the short-term debt expires. Generally, the higher the ratio of the current ratio ratio, the stronger the short-term solvency of the company; The lower the current ratio, the weaker the company's short-term solvency. As an important indicator of the financial situation, it should be maintained at an appropriate level. Traditional wisdom holds that a current ratio of 2 is appropriate. According to Gasgoo.com's data on the number of vehicles listed by China's 25 automakers, the average current ratio of listed auto makers at the end of 2010 was 1.14, which is lower than the conventional value. Let's take a look at the specific flow rate of each car company.

Vehicles with a current ratio higher than 1.5: GAC Group's highest Lifan upgrade

Of the 25 listed auto makers, the companies whose current ratio was above 2 at the end of 2009 and 2010 were only GAC Group. Its current ratio at the end of 2010 was 2.01, which was slightly lower than its level at the end of 2009 (2.03).

In addition to the GAC Group, there were four other companies with current ratios above 1.5 at the end of 2010, namely, Haima, Lifan, Jiangling, and FAW. Among them, the flow ratio of Lifan shares and Haima shares rose the fastest (at the same time, the statistical ratio of the fastest rising among the 25 companies), from 1.13 and 1.39 at the end of 2009 to 1.78 and 1.87 respectively.

Among the five companies mentioned above, except for Jiangling Motors' main business involving light commercial vehicles, the other four companies are mainly passenger car companies.

Car companies with current ratios ranging from 1 to 1.5: The fastest rising of Xingma car The fastest decline of Zhongtong bus

About half of the 25 car companies have a current ratio of between 1 and 1.5. At the end of 2009 and 2010, 13 companies (both passenger car companies and card and bus companies) had current ratios in this range. Among them, the current ratios of Geely Automobile, Great Wall Motors and Zhongtong Bus are both above 1.2.

At the end of 2010, the flow ratio of Xingma Automobile and Foton Motor Co., Ltd. rose the fastest among automakers with current ratios ranging from 1 to 1.5, from 1.09 and 0.97 at the end of 2009 to 1.31 and 1.19 at the end of 2010; followed by Shanghai Automotive. The 0.93 at the end of 2009 rose to 1.10 at the end of 2010. The fastest decline in the current ratio was Zhongtong Bus and Dongfeng Motor, which fell from 1.41 and 1.28 at the end of 2009 to 1.24 and 1.13 at the end of 2010 respectively.

Vehicles with current ratio below 1: BYD's lowest AVN Panther's decline is fastest. In general, the current ratio is not less than 1, which is the bottom line of the company's risk tolerance. Of the 25 vehicle companies listed in the statistics, 7 companies had a current ratio of less than 1 at the end of 2010, namely CNAF Panthers, ST Gold Cup, Jianghuai Automobile, Changan Automobile, GAC Changfeng, FAW Xiali and BYD. Among them, BYD has the lowest liquidity ratio, at 0.65, which is lower than its level at the end of 2009 (0.94).

At the end of 2009, the lowest flow rate among the 25 auto companies was FAW Xiali, which had a liquidity ratio of only 0.60. At the end of 2010, its current ratio rose to 0.72.

The AVIC Panthers’s current ratio fell the fastest (the fastest decline among the 25 companies surveyed), and the current ratio slipped from 1.28 at the end of 2009 to 0.97 at the end of 2010.