It reflects the company's ability to pay current debts without relying on inventory sales and accounts receivable. Generally speaking, the cash ratio is above 20%. However, this ratio is too high, which means that the current assets of enterprises have not been rationally utilized and the profitability of cash assets is low; If the amount of such assets is too high, the opportunity cost of the enterprise will increase.
The sudden drop from 0.4 to 0.25 shows that enterprises have increased their physical investment (cash use) without increasing the same amount of money withdrawal (cash recovery). The ratio of 0.25 is still under control. If there are no other abnormal factors, it should be a good thing, indicating that enterprises have turned more funds into capital. The only difference between capital and capital is that the former can't bring value-added (Delta), while the latter is the source of enterprise value-added. Only capital can participate in the business cycle of enterprises, which is usually called value chain.
As for the repayment without increasing the same amount, it is neutral, that is, the sales curve of the enterprise is relatively stable and is not disturbed by the increase of investment.