FA- Liquidity Flashcards
1
Q
Current ratio
A
Current assets: Current Liabilities
2
Q
Acid-test ratio
A
Current assets - Inventories : Current Liabilities
3
Q
Working capital ratio
A
Working capital : Total assets
4
Q
Debtors collection period ratio
A
Average debtors balance
÷
Credit sales per day
5
Q
Debtors turnover
A
Credit sales
÷
Average debtors balance
or
356
÷
Debtors collection period
6
Q
Days inventory on hand
A
Average inventory balance
÷
Cost of sales
7
Q
Inventory turnover
A
Cost of Sales
÷
Average inventory balance
or
365
÷
Days inventory on hand
8
Q
Creditors payment period
A
Average creditors balance
÷
Credit purchases day
9
Q
Creditors turnover
A
Credit purchases/ Average creditors balance
10
Q
Business cycle days
A
Days supply of inventory
+ Debtors collection period
- Creditors repayment period
