Liquidity Ratios, Liquidity Ratios : Such ratios comprise the Current Ratio and the Quick

Liquidity Ratios

Liquidity Ratios: Such ratios comprise the Current Ratio and the Quick Ratio or the acid test ratio. Liquidity ratios demonstrate the Liquid position of a company in the short term that is the capability of a firm to pay its obligations in short term.

• Current Ratio = Current Assets/Current Liabilities
• Quick Ratio = (Current Assets – Inventory)/Current Liabilities

Defensive Interval ratio is too a kind of efficiency ratio for liquidity which is computed as below:

Defensive Interval Ratio = Current Assets / Daily operational expenses.

The above ratio points out the ability of a company to operate without the long term assets or it can be state that how many days a company can operate only via the presence of current assets.

View Complete Question

Related Questions in Corporate Finance

Q : Convertible Bonds-Corporate Bonds State

State the term Convertible Bonds in Corporate Bonds?

Q : Explain essential hypotheses for

Which are the essential hypotheses so that valuations of the Economic Value Added (EVA) give similar results to discounting cash flows?

Q : Does it make sense to apply identical

The National Company responsible for the company where he work has newly published a document stating as that the levered beta of the sector of energy transportation is as 0.471870073 (it is 9 decimals). They acquired this number by considering the betas into the sect

Q : Assessing market expectations using CAPM

Assume that the risk-free rate is 1% and the expected market return is 9%. You are considering purchasing Super Soft stock, which currently sells for $100 a share and will pay its next (annual) dividend of $1.00 exactly one year from today. Super Soft is considered to

Q : Which frame work does not give very

Which model of frame work does not provide the very good prices for bonds?

Q : Using the DCF method Your Corp, Inc.'s

Your Corp, Inc.'s data is as follows:Beta; 1.30Recent dividend; $.90Expected dividend growth; 7%Expected return of the market; 14%Treasury Bills are yielding; 4%Most recent stock price; $65 A] Us

Q : Compute betas against local indexes

Does it make any sense to compute betas against local indexes while a company has a great part of its operations outside such local market? I have two illustrations: BBVA and Santander.

Q : Problem on raising new capital AB

AB Corporation has 3 million shares of common stock selling at $19 each. It also contains $25 million in bonds with coupon rate of 8%, selling at par. AB requires $10 million in new capital that it can raise by selling stock at $18, or bonds at 9% interest. The expect

Q : CAPM-Project Evaluation and Risk

UCD Vet Products – a hypothetical publicly traded corporation (UCDV) — is considering investing in a new line of equine DNA analysis technology for race horse breeders. The project will yield the net cash flows listed in the table below. Assume that this p

Q : Types of agency Types of agency :

Types of agency: Specific types of Agency include:A) Auctioneers: Are an agent of vendor until the fall of the hammer when they become an agent for the purchaser.B)

Discover Q & A

Leading Solution Library

Avail More Than 1432049 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1923150
Asked

3,689

Active Tutors

1432049

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment