Liquidity And Activity Ratios Flashcards by Matt Webb | Brainscape

Q

Current ratio

A

Current assets/current liabilities

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Q

Quick ratio (acid test ratio)

A

CA-inventory-prepaid expenses/CL

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Q

Inventory turnover

A

Cost of sales/average inventory

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Q

Inventory holding period

A

365 days/inventory turnover

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Q

Trade receivable turnover

A

Credit sales/average trade receivable

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Q

Receivables collection period

A

365 days/trade receivable turnover

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Q

Payables collection period

A

(Average trade payables/cost of sales) x 365

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