Importance of the quick ratio
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Which ratio measures the firm’s ability to pay off current liabilities with current assets without liquidating its inventory? Quick ratio. Input cost is $2, fixed costs are $8, and the total cost of the next unit of production is $24. What is the additional cost incurred from …
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Short-term debts are expected to be repaid within one year and are of importance to the firm’s creditors who expect to be paid on time. 37. Two key liquidity ratios are: a. current ratio. b. quick ratio. 38. Current ratio = Current assets. Current liabilities . 39. Acid test ratio = Cash + marketable securities + receivables. Current ...
[DOC File]FINANCIAL RATIOS REPORT
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A more conservative measure of the company’s liquidity position (which we might pay careful attention to if inventory tends to be illiquid for firms like Aurora) is the quick ratio, computed as. Quick Ratio = . Removing the $3,400,000 inventory from the numerator of the current ratio above, we compute. Quick Ratio …
[DOC File]Major Points
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Feb 18, 2010 · current ratio. B. debt-to-assets ratio. C. quick ratio. D. times-interest-earned ratio. 8) A quick ratio that is much smaller than the current ratio reflects A. a small portion of current assets is in inventory. B. that the firm will have a high inventory turnover. C. a …
[DOC File]1) Maximization of shareholder wealth is a concept in which
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A Question on ratio analysis especially on Current Ratio and Quick Ratio A Question on Comparative Statements/Common-size statements especially comparative income-statement. A Question on Companies Balance Sheet as per Schedule III , Part I of the …
[DOC File]Texas A&M University
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34. The most widely used profitability ratio is the: medium a. quick ratio. d b. profit margin. c. return on assets. ... The increased importance of human capital and other intangible assets has increased accounting complexity and the importance of management judgments and estimates.
[DOC File]CHAPTER 18 – Understanding Financial Information and ...
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QUICK ASSETS/LIQUIDITY/ACID TEST/1:1 RATIO: The liquid ratio is a measure of the extent to which liquid resources are immediately available to meet current obligations. Liquid ratio 1:1 is ...
Importance and limitations of quick ratio | WIKIACCOUNTING
Such a ratio is helpful in cases where the collection period for receivables might be unusually long or where the composition of current liabilities is such that extreme pressure exists for immediate payment.
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