Quick and current ratio
[DOC File]CHAPTER 16
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Current Assets Current Ratio = ----- Current Liabilities Quick Ratio Quick Assets Quick Ratio = ----- Current Liabilities Quick Assets = Current Assets - Inventories Net Working Capital Ratio Net Working Capital Net Working Capital Ratio = ----- Total Assets ...
[DOC File]RATIO ANALYSIS - ICSI
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The company’s current ratio is 1.2, its quick ratio is 0.7, and its inventory turnover ratio is 4. The company would like to increase its inventory turnover ratio to the industry average, which is 5, without reducing its sales. Any reductions in inventory will be used to reduce the company’s current liabilities.
[DOC File]Liquidity Ratios
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Quick Ratio Current Assets - Inventory – Prepaid items ÷ Current Liabilities. This is similar to the Current Ratio. The difference is. that it does not include assets that cannot be quickly converted to cash. The higher the number, the more liquid the company. LEVERAGE RATIOS Debt Ratio
[DOC File]Chapter 7 Working Capital Management
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If a firm has $100 in inventories, a current ratio equal to 1.2, and a quick ratio equal to 1.1, what is the firm's Net Working Capital? $0. $100. $200. $1,000. $1,200. To measure a firm's solvency as completely as possible, we need to consider. The firm's relative proportion of debt and equity in its capital structure
[DOC File]Ratios
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Quick or Acid-test Ratio – (Current Assets – Inventory)/Current Liabilities. Example: A current ratio of 2.0: For every dollar of current liabilities, the company has $2 of current assets excluding inventory. The quick ratio is a more conservative measure of liquidity. That is, the quick ratio assumes inventory is not very liquid; therefore ...
[DOC File]Examples of Questions on Ratio Analysis
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Acid-test (quick) ratio = Quick assets* Current liabilities = $79,000 $109,000 = 0.72 *Quick assets = Cash + Marketable securities + Current receivables = $16,000 + $24,000 + $39,000 = $79,000 261. Steinkraus Corporation has provided the following data:
[DOC File]Example Financial Ratios
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Current Ratio Current Assets / Current Liabilities Quick Ratio (Current Assets – Inventory) / Current Liabilities Receivables Turnover Sales / Balance Sheet Receivables Receivables Days Total Receivables / Receivables Turnover Inventory Turnover (Total) Balance Sheet Cost of Goods Sold (COGS) / Inventory Inventory Days ...
[DOC File]Financial Ratios
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Current liabilities includes sundry creditors, bills payable, short- term loans, income-tax liability, accrued expenses and dividends payable. 2. ACID TEST RATIO / QUICK RATIO. It has been an important indicator of the firm’s liquidity position and is used as a complementary ratio to the current ratio.
Difference Between Current Ratio and Quick Ratio (With Table)
Quick Ratio = Quick Assets ÷ Current Liabilities. Quick Ratio = ($200,000 + $100,000 + $60,000) ÷ $200,000. Quick Ratio = 1.8 PE 15–3B. a. Current Ratio = Current Assets ÷ ...
[DOC File]Ratio and Accounts Analysis - CPA Diary
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4.7 Conventional wisdom has it that an ideal current ratio is 2 and an ideal quick ratio is 1. It is very tempting to draw definite conclusions from limited information or to say that the current ratio should be 2, or that the quick ratio should be 1.
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