Liquidity Flashcards

1
Q

Current ratio

A

Indicates the ability to repay current liabilities out of current assets

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2
Q

Acid-test ratio

A

ability to repay current liabilities without inventory

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3
Q

Working capital ratio

A

How much of total assets are relatively liquid

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4
Q

Debtors collection period

A

Idea of average period it takes between date of sale and final receipt of cash

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5
Q

Debtors turnover

A

Credit collection efficiency

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6
Q

Debtors components

A

Collection period and turnover

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7
Q

Inventory

A

Days on hand and turnover

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8
Q

Creditors

A

Repayment period, turnover and business cycle

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