Achmad Maulana Hasanuddin
46110003
3A/D-4
CASH REINVESTMENT RATIO
Cash
Flow Analysis
Cash flow
statement is a report about the cash inflow and the cash outflow. In analysing
the cash flow, there are 5 financial ratio that can be used, such as :
The ratio of operating cash flow to current liability
The ratio of operating cash flow to total liability
The ratio of operating cash flow to total assets
cash flow adequacy ratio (CFAR)
cash reinvestment ratio (CRR)
Cash Reinvestment Ratio (CRR)
cash
reinvestment ratio (CRR) is an analytical technique that
measures how much of the invesment in assets that describes the operating cash
flow is retained and invested back in the company to replace the assets and
support the growth of company’s operation.
The formula for calculating Cash Reinvestment Ratio (CRR)
Example:
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Interpretation
Shows that in 2008 , PT United Tractors Tbk and a subsidiary reinvest cash from operations by 17 % to replace
assets and support the company’s growth. Whereas in 2009 this company reinvest
cash operations by 16%.
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