Financial Ratios and 19th Century Spain
Financial Ratios
Liquidity Ratios
STL Ratio
Measures the ratio between available liquid assets and those nearing liquidity against short-term borrowed funds. (AC – E / PC x 100).
Long-Term Guarantee Ratio
Measures the ratio of total net assets to total debt as a guarantee of long-term liquidity. (ANC + AC / PNC + PC x 100).
Financial Liquidity
(AC / PC x 100).
Financial Balance
Measures the percentage of current capital on total assets. Positive values indicate funding of current assets with permanent resources. Negative values indicate financing of non-current assets with short-term debt. (AC – PC / AT x 100).
Financial Autonomy
Studies the percentage of total net assets on the financial structure, representing the company’s capitalization. (PAT N / PN + P x 100).
Short-Term Borrowing Ratio
Analyzes the percentage of short-term creditors on the total financial structure. (PC / PAN + P x 100).
Long-Term Borrowing Ratio
Studies the percentage of long-term debt over the total financial structure. (PNC / PN + P x100).
Total Debt Ratio
(PC + PNC / NE x 100).
Economic Efficiency
Measures the ratio between earnings before interest and taxes and total assets, expressing the efficiency of the operating cycle. (Rev. EXPL + ING. FINANCE / A x 100).
Financial Return
Represents the percentage yield on the company’s own funds, indicating owner’s income relative to risk. (- Rev. EXERCISE / BW x 100).
Working Capital (AC – PC)
- ? 70% (-): Temporary liquidity problem.
- (+): Sufficient cash for payments.
- ? 120% (+): Good situation with ample assets to cover debts.
- ? 200% (-): Short-term liquidity problems.
Other Ratios
- ? 25% (+): Adequate own resources, (-): Over-indebtedness.
- ^ ? 5% (-): Problems financing current assets.
- ? 8% (+): Correct use of assets.
- ? 10% (+): Proper return on capital.
Indebtedness
Over-reliance on external funds, potentially leading to unnecessary interest charges.
19th Century Spain
Secularization
A long historical, economic, and social process that involved selling church-held land and assets to increase national wealth and create a middle class.
Constitution of 1845
Embodied national sovereignty, constituent power of the people, and a constitutional monarchy based on the king and courts.
Political Parties During the Reign of Isabella II
- Moderate Party
- Progressive Party
- Liberal Party
- Carlist Party
Differences Between Moderate and Progressive Parties
- Social Membership: Moderate party was heterogeneous, including wealthy merchants and old nobility. Progressive party was predominantly middle class.
- Sovereignty: Moderates believed in shared sovereignty between the crown and courts. Progressives advocated for popular sovereignty.
- Suffrage: Moderates used census suffrage to restrict participation. Progressives used census suffrage but allowed greater participation.
Constitution of 1869
A liberal and democratic constitution that established a broad regime of freedom, national sovereignty, universal male suffrage, and a parliamentary monarchy.
Pact of Ostend
An agreement to overthrow Queen Isabella II and establish a republican regime based on the principles of revolution and universal male suffrage.
The Glorious Revolution
A revolutionary uprising that led to the dethronement of Queen Isabella II and the start of the Sexenio Democrático.
Sandhurst Manifesto
A political manifesto by Prince Alfonso advocating for a parliamentary monarchy.
Cantonalist Phenomenon
An insurrectionary movement advocating for radical federalism and the division of Spain into independent cantons.
Federalism vs. Centralism
Federalism: A political doctrine advocating for power sharing between a central government and regional entities.
Centralism: A system where government functions are concentrated in a central authority.
Baldomero Espartero
A prominent Spanish general and politician who served as Regent of Spain and played a key role in the First Carlist War.
Ramón María Narváez
A Spanish soldier and politician who served as Prime Minister multiple times during the reign of Isabella II.
Leopoldo O’Donnell
A Spanish noble, politician, and military leader who served as Prime Minister during the reign of Isabella II.