THE COMPARISON BETWEEN LIQUIDITY MEASUREMENT OF TRADITIONAL RATIOS AND CASH FLOW RATIOS (The Study of Tobacco Company Listed On Indonesia Stock Exchange (IDX))

This research is a comparative research, which is aimed to obtain an empirical evidence about whether there are significant differences between traditional ratios and cash flow ratios in liquidity measurement of the tobacco industry listed on IDX over five years period (2011-2015). The ratio used are four ratios of traditional ratios and four ratios of cash flow ratios in order to see differences of both ratios in liquidity measurement. This research used tobacco industry listed on Indonesia Stock Exchange (IDX) in year 2015 as the object of the research. All four companies on tobacco industry listed on IDX were selected to be samples of research. Then analysis of data were processed by Microsoft Excel version 2013 and SPSS version 23.0 with using Mann Whitney U Test model to test the hypothesis. The result of this research proved that there are significant differences between traditional ratios and cash flow ratios in liquidity measurement of tobacco company listed on IDX. The traditional ratios showed higher mean rank than cash flow ratios which indicates that traditional ratios of tobacco companies listed on IDX were better than the cash flow ratios. But, It is better to used both types of ratios. Traditional ratios and cash flow ratios is the complementary, so should be used together to reach a comprehensive conclusion about the liquidity position of the companies. Moreover, cash flow ratios are more effective measures because it give more information about the company’s ability to meet its commitment. Keywords: Liquidity analysis, Traditional ratios, Cash flow ratios, Tobacco industry Sector Listed on ID