What is the quick ratio
[DOC File]Ratio Analysis
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Quick Ratio: The ratio of cash and temporary investments to current liabilities. Quick assets are the assets used to cover a sudden emergency. This is a more severe test of the current debt paying ability of the facility. Such a ratio is helpful in cases where the collection period for receivables might be unusually long or where the ...
How to Calculate the Quick Ratio (+Examples) | The …
Quick Ratio = 1.3. PE 15–4A. a. Accounts Receivable Turnover = Net Sales ÷ Average Accounts Receivable . Accounts Receivable Turnover = $1,600,000 ÷ $100,000. Accounts Receivable Turnover = 16.0. b. Number of Days’ Sales in Receivables = Average Accounts Receivable ÷ Average Daily Sales.
[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]FINANCIAL RATIOS REPORT
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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. It establishes the relationship between quick assets and current liabilities. It is calculated by dividing quick assets by the current liabilities.
[DOC File]CHAPTER 16
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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 Net Working Capital = Current Assets - Current Liabilities Profitability Analysis Ratios ...
Quick Ratio Definition
Apr 30, 2020 · The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its short-term obligations with its most liquid assets.
Quick Ratio Definition
Feb 07, 2020 · The quick ratio, also referred to as the acid-test ratio, is considered a liquidity ratio. The quick ratio definition is simple: it calculates and measures the ability of your company to pay its ...
[DOC File]Example Financial Ratios
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The quick ratio is considered a more accurate measure of a firm’s ability to meet its current liabilities. In calculating this ratio, inventory is subtracted from the total current assets because it is the most commonly inflated and least liquid current asset. Benchmark: Kmart’s quick ratio of .35 relative to the industry ratio of .4 ...
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