Liquidity Ratios Flashcards

1
Q

Net current asset ratio

A

Current assets / current liabilities

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2
Q

Liquid capital ratio

A

Current assets - closing inventory / current liabilities

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3
Q

Rate of inventory turnover

A

Cost of sales / average inventory

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4
Q

Payable days

A

Payables / cost of sales X 365

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5
Q

Receivable days

A

Receivables / credit sales X 365

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