Liquidity Ratios Flashcards by melissa siemonek | Brainscape

Q

How is current ratio (times) calculated?

A

Current assets/current liabilities

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Q

How is acid test/quick ratio (times) calculated?

A

Current assets - inventories/current liabilities

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Q

How is defensive interval days calculated?

A

Quick assets/Average daily cash from operations

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Q

How is quick assets calculated?

A

Current assets - inventories

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