Liquidity Ratios

Question 1

Inventory Holding Days

Answer 1

Inventory
————- X 365
COGS

Question 2

Receivables collection period

Answer 2

Trade receivables
————————– X 365
Revenue

Question 3

Payables Payment Period

Answer 3

Trade Payables
———————- X 365
COGS

Question 4

Working Capital

Answer 4

Current Assets - Current Liabilities

Question 5

Current Ratio

Answer 5

Current Assets / Current Liabilities

Question 6

Quick Ratio (Acid Test)

Answer 6

(Current Assets - Inventory) / Current Liabilities
-
-
How well placed you are to pay short term liabilities