English For Accounting

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3B D3

361 10 051

Cash Reinvestment Ratio (CRR)

1.      Financial Statements Analysis

Process of reviewing and evaluating a company financial statements (such as the balance sheet or profit and loss statement), thereby gaining an understanding of the financial health of the company and enabling more effective decision making.

2.      Kinds Of Financial Statement Analysis

1. Securitas Analysis

2. Cash Flow Analysis

3. Risk Analysis

4. Bankruptcy Prediction Analysis

5. Profitability Analysis. Etc.

3.      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 :

1.      The ratio of operating cash flow to current liability

2.      The ratio of operating cash flow to total liability

3.      The ratio of operating cash flow to total assets

4.      Cash flow adequacy ratio (CFAR)

5.      Cash reinvestment ratio (CRR)

4.      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.

5.      The formula for calculating
 Cash Reinvestment Ratio (CRR)

6.      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%.