Refers to the ratio of current assets to current liabilities. It measures the liquidity of companies, i.e. their ability to meet current debt payments when due. A ratio of 1 indicates that the company has exactly balanced its current liabilities
with current assets. The further the ratio below 1, the higher is the risk of the company running into a liquidity problem. A ratio above 1 indicates an excess of liquidity in the company.
Refers to the ratio of total equity by total assets. It measures the dependence of companies on external funding, i.e. funding which is not from its shareholders or its overseas headquarters in the case of local branch of a foreign enterprise. The lower
the ratio, the higher is the company’s dependence on external funding.
Profit before Tax
Refers to the total of incomes less expenses. It comprises two broad components, i.e. operating and non-operating income such as gain or loss on disposal of net assets.
Return on Assets (ROA)
Refers to the ratio of profit before interest and tax to total assets. It measures the efficiency of companies in their use of assets to generate earnings. Interest payments are not deducted from earnings as they are the cost of financing business capital
rather than an operating cost. The resulting ratio measures the earning capacity of the companies’ assets regardless of how the assets are financed.
Return on Equity (ROE)
Refers to the ratio of profit before tax to total equity. It measures companies’ profitability, i.e. the rate of return that companies have earned on the capital provided by the shareholders after accounting for payments to all other providers
Refers to items controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the entity. Examples include property, plant and equipment, investment in subsidiaries/associates and cash & cash
Liabilities are present obligations of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resouresources embodying economic benefits. Examples include loans, trade payables and deposits (applicable for financial institutions only).
Refers to the shareholders’ interest in the enterprise after deducting all its liabilities from its assets. Total equity comprises mainly share capital, retained earnings and other reserves. For Singapore branches of foreign-incorporated enterprises, head office accounts (i.e. the net amount owed by Singapore branches to the foreign head offices) are used as proxies for their equity.
Share capital refers to the amount contributed by shareholders through the issues of shares.