Liquidity And Working Captial Control Flashcards
0
Q
Acid/ quick ratio
A
Current assets - inventory / current liabilities
1
Q
Current ratio
A
Current asset / current liabilities
2
Q
Inventory holding period ( days )
A
Inventory held / cost of sales x 365 days
3
Q
Debtor collection period ( days )
A
Trade debtors / total credit sales x 365 days
4
Q
Creditor payment period
A
Trade creditors / total credit purchases x 365 days
5
Q
Inventory turnover ratio
A
Cost of sales / inventory held
