Liquidity ratios Flashcards
1
Q
current ratio
A
currents assets/current liabilities
2
Q
acid-test ratio
A
cash,short term inv, notes receivable, acc rec/ current liab
3
Q
operating cashflow to current liab. ratio
A
operating cash flows/ average current liabilities
4
Q
accocunts receivable turnover
A
(total rev /avrg acc. rec)
5
Q
average collection period
A
365/accounts receivable turnover
6
Q
working capital turnover
A
revenue/average working capital
7
Q
for what?
A
ability to pay short term obligations
8
Q
owners/stock holders prefer….
A
low cause long terms assets are viewed as more valuable
9
Q
creditors prefer…
A
hig because then for sure they’ll get their money
10
Q
what for?
A
to see the ability to meet short term obligations
