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LIQUIDITY RATIO
3. Debt to Equity Ratio

Debt to equity ratio

10%
10%
9.70%
9% 9.08% 9.14%
9%
2018 2017 2016

2018 2017 2016

Debt to equity ratio is a financial ratio that measure the relative value of shareholder’s
equity and debt used to finance assets of the company. Debt to equity ratio in 2016 is 9.14% and

then fall to 9.08% in 2017. But it seems to increase very large amount in 2018 which is 9.70%.
Lower ratio means good for the company. The higher the ratio, the more indebted the firm. The
ways to improve debt to equity ratio is AIA Company must focus on long term debt only. This is

because the risk on long term liabilities are different than for short term and payables.

ASSET QUALITY RATIO

4. Asset Quality Ratio

Asset Quality Ratio

10%
9.87%
10%
9.35% 9.38%
9%
2018 2017 2016

2018 2017 2016

Asset Quality Ratio can be defined to measure the degree of exposure to equity risk. High
asset quality ratio means the AIA Company facing little credit risk in manage their company. For

the three years, there shown fall performance of ratio from 2016 to 2018. The number decrease
from 9.87% to 9.38% in 2017 and then decrease to 9.35%. We can see the ratio shown that AIA
Company facing high credit risk in managing their business. Several suggestions to improve their

asset quality ratio is managing their asset by tracking assets as they come into the company or
acquired by the company. This help to make the asset conducted properly

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