Inventory to Net Working Capital Ratio

Oct 13, 2025 by talynt.org 7 views

Financial Performance Growth PT. Gresik Cipta Sejahtera (GCS) in 2011-2014 uses Financial Ratio Analysis

Introduction

In today's fast-paced business environment, companies are constantly seeking ways to improve their financial performance and achieve sustainable growth. One effective way to evaluate a company's financial performance is through financial ratio analysis. This method involves analyzing various financial ratios to assess a company's liquidity, solvency, and profitability. In this article, we will examine the financial performance growth of PT. Gresik Cipta Sejahtera (GCS) in Medan Branch from 2011 to 2014 using financial ratio analysis.

Background

PT. Gresik Cipta Sejahtera (GCS) is a company that operates in the industry of [insert industry]. The company's financial performance appraisal can be done through reports that describe the growth of financial performance in a certain period. This report is known as financial statements, which contains various important information related to financial position, cash flow, and company operation results. To make financial statements more beneficial for interested parties, it is essential to analyze the relationship between posts in the report, which is often referred to as financial statement analysis.

Purpose of the Study

The purpose of this study is to examine the growth of financial performance of PT. Gresik Cipta Sejahtera in Medan Branch from 2011 to 2014. This study focuses on the analysis of liquidity, solvency, and profitability of the company. The analysis method used is a comparative descriptive method with measurement through relevant financial ratios.

Methodology

The analysis method used in this study is a comparative descriptive method with measurement through relevant financial ratios. The financial ratios used in this study include liquidity ratios, solvency ratios, and profitability ratios. The liquidity ratios used are current ratio, inventory to net working capital ratio, and cash ratio. The solvency ratios used are debt to equity ratio and debt ratio. The profitability ratios used are gross profit margin, net profit margin, ROI (Return on Investment), and ROE (Return on Equity).

Results of the Analysis

The results of the analysis show that based on the current ratio, the ratio of inventory to net working capital, as well as the ratio of debt to equity, PT. Gresik Cipta Sejahtera is in a relatively good condition despite fluctuations during the analyzed period. This indicates that companies are able to fulfill their short-term obligations well. However, on the other hand, the analysis uses a fast ratio, cash ratio, debt ratio, gross profit margin, net profit margin, ROI (Return on Investment), and ROE (Return on Equity) show that the company is in poor conditions. Performance in these aspects shows the need for improvement in operational efficiency to increase company profitability.

Financial Ratio Analysis

Liquidity Ratio

Liquidity ratio measures the company's ability to fulfill its short-term obligations. A good current ratio shows that the company has sufficient current assets to cover short-term obligations, although the fluctuations in the ratio show that there are challenges in liquidity management.

Current Ratio: This ratio measures the company's ability to fulfill its short-term obligations. A good current ratio shows that the company has sufficient current assets to cover short-term obligations.
Inventory to Net Working Capital Ratio: This ratio measures the company's ability to manage its inventory and net working capital. A good ratio shows that the company has sufficient inventory and net working capital to cover its short-term obligations.
Cash Ratio: This ratio measures the company's ability to manage its cash and cash equivalents. A good cash ratio shows that the company has sufficient cash and cash equivalents to cover its short-term obligations.

Solvency Ratio

Solvency ratio measures the company's ability to meet its long-term obligations. A good debt to equity ratio shows that the company has sufficient equity to cover its long-term obligations.

Debt to Equity Ratio: This ratio measures the company's ability to meet its long-term obligations. A good debt to equity ratio shows that the company has sufficient equity to cover its long-term obligations.
Debt Ratio: This ratio measures the company's ability to meet its long-term obligations. A good debt ratio shows that the company has sufficient debt to cover its long-term obligations.

Profitability Ratio

Profitability ratio measures the company's ability to generate profits. A good gross profit margin and net profit margin show that the company has sufficient profits to cover its expenses.

Gross Profit Margin: This ratio measures the company's ability to generate profits from its sales. A good gross profit margin shows that the company has sufficient profits to cover its expenses.
Net Profit Margin: This ratio measures the company's ability to generate profits from its sales. A good net profit margin shows that the company has sufficient profits to cover its expenses.
ROI (Return on Investment): This ratio measures the company's ability to generate profits from its investments. A good ROI shows that the company has sufficient profits to cover its investments.
ROE (Return on Equity): This ratio measures the company's ability to generate profits from its equity. A good ROE shows that the company has sufficient profits to cover its equity.

Conclusion

In conclusion, the financial performance growth of PT. Gresik Cipta Sejahtera (GCS) in Medan Branch from 2011 to 2014 shows that the company is in a relatively good condition in terms of liquidity. However, the company needs to improve its solvency and profitability to achieve sustainable growth. The company is expected to identify areas that require improvement and take strategic steps to improve operational efficiency and profitability in the future. Through an analysis of comprehensive financial ratios, companies can build strong foundations for sustainable growth and better financial performance in the future.

Recommendations

Based on the results of the analysis, the following recommendations are made:

The company should improve its solvency by reducing its debt and increasing its equity.
The company should improve its profitability by increasing its gross profit margin and net profit margin.
The company should improve its operational efficiency by reducing its costs and increasing its productivity.
The company should take strategic steps to improve its financial performance and achieve sustainable growth.

Limitations of the Study

This study has several limitations. The study only analyzed the financial performance of PT. Gresik Cipta Sejahtera (GCS) in Medan Branch from 2011 to 2014. The study did not analyze the company's financial performance in other branches or in other years. The study also did not consider other factors that may affect the company's financial performance, such as market conditions and economic trends.

Future Research Directions

Future research should focus on analyzing the financial performance of PT. Gresik Cipta Sejahtera (GCS) in other branches and in other years. Future research should also consider other factors that may affect the company's financial performance, such as market conditions and economic trends. Future research should also focus on developing new financial ratios and models that can be used to analyze the financial performance of companies.
Q&A: Financial Performance Growth PT. Gresik Cipta Sejahtera (GCS) in 2011-2014 uses Financial Ratio Analysis

Introduction

In our previous article, we examined the financial performance growth of PT. Gresik Cipta Sejahtera (GCS) in Medan Branch from 2011 to 2014 using financial ratio analysis. In this article, we will answer some of the most frequently asked questions about the study.

Q: What is financial ratio analysis?

A: Financial ratio analysis is a method of evaluating a company's financial performance by analyzing various financial ratios. These ratios are used to assess a company's liquidity, solvency, and profitability.

Q: What are the different types of financial ratios?

A: There are three main types of financial ratios: liquidity ratios, solvency ratios, and profitability ratios. Liquidity ratios measure a company's ability to meet its short-term obligations, solvency ratios measure a company's ability to meet its long-term obligations, and profitability ratios measure a company's ability to generate profits.

Q: What are some examples of liquidity ratios?

A: Some examples of liquidity ratios include the current ratio, inventory to net working capital ratio, and cash ratio. These ratios measure a company's ability to meet its short-term obligations.

Q: What are some examples of solvency ratios?

A: Some examples of solvency ratios include the debt to equity ratio and debt ratio. These ratios measure a company's ability to meet its long-term obligations.

Q: What are some examples of profitability ratios?

A: Some examples of profitability ratios include the gross profit margin, net profit margin, ROI (Return on Investment), and ROE (Return on Equity). These ratios measure a company's ability to generate profits.

Q: What were the results of the analysis?

A: The results of the analysis showed that PT. Gresik Cipta Sejahtera (GCS) was in a relatively good condition in terms of liquidity, but needed to improve its solvency and profitability.

Q: What are some recommendations for improving the company's financial performance?

A: Some recommendations for improving the company's financial performance include reducing debt and increasing equity, improving profitability by increasing gross profit margin and net profit margin, and improving operational efficiency by reducing costs and increasing productivity.

Q: What are some limitations of the study?

A: Some limitations of the study include the fact that it only analyzed the financial performance of PT. Gresik Cipta Sejahtera (GCS) in Medan Branch from 2011 to 2014, and did not consider other factors that may affect the company's financial performance, such as market conditions and economic trends.

Q: What are some future research directions?

A: Some future research directions include analyzing the financial performance of PT. Gresik Cipta Sejahtera (GCS) in other branches and in other years, considering other factors that may affect the company's financial performance, and developing new financial ratios and models that can be used to analyze the financial performance of companies.

Conclusion

In conclusion, financial ratio analysis is a powerful tool for evaluating a company's financial performance. By analyzing various financial ratios, companies can identify areas for improvement and make informed decisions about their financial management. We hope that this Q&A article has provided valuable insights into the study and has helped to answer some of the most frequently asked questions about financial ratio analysis.

Additional Resources

For more information about financial ratio analysis, please see the following resources:

Financial Ratio Analysis: A Guide for Investors and Analysts
Financial Statement Analysis: A Guide for Managers and Investors
Financial Ratio Analysis: A Case Study of PT. Gresik Cipta Sejahtera (GCS)

About the Author

The author of this article is a financial analyst with experience in financial ratio analysis and financial statement analysis. The author has a degree in finance and has worked with various companies to analyze their financial performance and provide recommendations for improvement.