Current Ratio: The current ratio is a liquidity ratio that measures a company's ability to pay short-

term obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables.

Current Assets
Current Ratio =
Current Liabilities

Year Current Assets Current Liabilities Current Ratio

2015 1095.9605 654.7974 1.673739847

2017 1710.5146 1288.7529 1.327263434

2018 2388.7595 2031.7403 1.175720883

2019 2901.0071 2571.9818 1.127926761

2020 2991.0378 2679.1787 1.116401008

Current Ratio
1.67
1.33
1.18 1.13 1.12

2015 2017 2018 2019 2020

Current Ratio

Interpretation: Current Ratio of Advance Chemical Industry limited of five year (2020-
2017,2014) ranged between 1.67 to 1.12 respectively. ACI Ltd. Current Assets are just enough to
pay down the short-term obligations. However, there is a certain risk associated with nonpayment’s
of receivables also ACI Ltd short-term debts is increasing yearly.

Operating Cashflow to current Liabilities Ratio: Operating cash flow ratio measures the
adequacy of a company’s cash generated from operating activities to pay its current liabilities. It
is calculated by dividing the cash flow from operations by the company’s current liabilities.
Operating cash flow ratio determines the number of times the current liabilities can be paid off out
of net operating cash flow. A higher ratio is better.

Cash Flow from Operations

Operating Cash Flow Ratio =
Current Liabilities

Year Cashflow From Current Operating Cashflow to

Operation (TAKA Liabilities (TAKA current Liabilities Ratio
in Corer) in Corer)
2015 1391.1937 654.7974 2.124617019
2017 1702.5246 1288.7529 1.321063642
2018 94.0911 2031.7403 0.046310594
2019 259.9011 2571.9818 0.101050909
2020 584.8484 2679.1787 0.218293912

Operating Cashflow to current

Liabilities Ratio
2.12

1.32

0.1 0.22
0.046
2015 2017 2018 2019 2020

Operating Cashflow to current Liabilities Ratio

Interpretation: The company have maintained operating cash flow ratio of more than 1 in 2016
and 2017. However, company failed to maintain its operating cashflow in 2018 to 2020. If we drill
deeper, we find that the drop in the ratio in 2018-2020 was due to increase in current liabilities
balance and drop in cash flow from operations.