2.3.2 Liquidity Flashcards
1
Q
calculate Acid test ratio
A
(Current assets –Inventories) / Current
liabilities
2
Q
Calculate Current Ratio
A
Current assets / Current liabilities
3
Q
calculate Working capital
A
Current assets – Current liabilities
4
Q
ways to improve liquidity
A
Use of overdraft facilities
Negotiate additional short-term or long-term loans
Encourage cash sales and sell off stock
Sale and leaseback
Introduce fresh capital