Quick ratio finance
[DOC File]Multiple Choice Questions
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Quick Ratio = (CA-INV) / CL. Debt Management (Financial Leverage) – Use of debt in the capital structure. Total Debt Ratio = TD / TA Debt/Equity Ratio = TD / TE Equity Multiplier = TA / TE TIE = EBIT / Interest expense. ... ETS – Finance Review ...
[DOC File]COMMON RATIOS
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The ideal quick ratio is. a) 2:1 b) 1:1. c) 5:1 d) None of the above. A very high current ratio indicates. a) High efficiency b) flabby inventory c) position of more long term funds. d) b or c. Financial leverage means. a) Use of more debt capital to increase profit. b) High degree of solvency. c) Low bank finance d) None of the above
[DOC File]Example Financial Ratios
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2. Quick Ratio (or Acid Test Ratio)-- The quick ratio is a more restrictive measure than the current ratio. The numerator consists of the . most liquid. current assets. It assumes a worst-case scenario in which inventory cannot be sold. The average for all manufacturing companies is about one (1.0).
Quick ratio - Wikipedia
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]PRINCIPLES OF FINANCE - Rowan University
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Current assets Current ratio = ----- Current liabilities. Return Earnings available for common stockholders ... on total = -----assets Total assets Current assets - Inventory. Quick Ratio = ----- Current liabilities. Return Earnings available for common stockholders ... Formulas Cover Sheet-Exam 1-Business Finance Author: John Zietlow Last ...
[DOC File]Examples of Questions on Ratio Analysis
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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, it should not be counted. Profitability Ratios. 1.
[DOC File]Ratio Analysis
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Use the ratio information provided below and complete the balance sheet and sales information in the table that follows for Besley Industries using the following financial data: Debt ratio: 50 percent. Quick ratio: 0.80 times. Total assets turnover: 1.5 times . Average Collection Period: 36 days. Gross profit margin: 40 percent
[DOC File]Formulas Cover Sheet-Exam 1-Business Finance
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Company M has a current ratio of 2, quick ratio of 1.8, net income of $180,000, profit margin of 10% and account receivable balance of $150,000. What is the firm’s Average Collection period? ACP = …
[DOC File]MCQs on Ratio Analysis (Financial management-module-c)
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Quick ratio Current ratio A Increase Decrease B No change Increase C Increase No change D Increase Increase 21. A company sells inventory for cash to a customer, at a selling price which is below the cost of the inventory items. How will this transaction affect the current ratio and the quick ratio immediately after the transaction? Current ...
[DOC File]ETS – Finance Review
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The quick ratio over the last three years overall has remained stable due to the stability of the current assets and current liabilities as a percentage of total assets. However, with a 6% drop in current assets minus inventory and a 2% increase in current liabilities, the ratio …
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