Question

What is a financial statement analysis ratio that includes current liabilities in the calculation?

What is a financial statement analysis ratio that includes current liabilities in the calculation?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:

Financial statement analysis ratios- Are the numbers that tell the overall financial health of the company. Ratios are the indicators of financial well being, profitability, solvency and liquidity position of the company.

Financial statement analysis ratio that includes Current liabilities in calculation is the "Liquidity ratios".

Liquidity Ratios- These ratios tell the liquidity position of the company. Higher the ratio means that company is highly liquid and it is able to meet its short term obligations through short term assets.

Liquidity ratios that have current liabilities in calculation, are as following:

Current ratio = Current assets / Current liabilities

Quick ratio/Acid test ratio = Liquid assets / Current liabilities

Cash ratio = Cash & cash equivalents / Current liabilities

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Explain to your classmates what assets, liabilities, and equity are and tell which financial statement includes...
Explain to your classmates what assets, liabilities, and equity are and tell which financial statement includes these items. On a classified balance sheet, you see current assets and current liabilities as well as long-term assets and long-term liabilities. Why is it important to classify items as current and long-term? How would management use this information and how would creditors use this information?
For each of the following financial statement ratios, identify whether the ratio provides analysis regarding a...
For each of the following financial statement ratios, identify whether the ratio provides analysis regarding a firms: Profitability Liquidity Solvency Common stockholder valuation Earnings Per Share (EPS) Quick ratio Gross profit percentage (or margin) Dividend Yield Price to Earnings ratio Accounts receivable turnover Operating cash flow to current liabilities ratio Days' sales in inventory Debt to Equity ratio Return on sales Return on assets Current ratio
Calculate the current ratio and the quick ratio for the following partial financial statement for Tootsie...
Calculate the current ratio and the quick ratio for the following partial financial statement for Tootsie Roll. Assets Liabilities Current assets: Current liabilities: Cash and cash equivalents (Note 1) $ 4,244,190 Notes payable to banks $ 652,221 Investments (Note 1) 32,553,769 Accounts payable 6,984,075 Accounts receivable, less allowances of $750,000 and $746,000 16,226,648 Dividends payable 556,607 Inventories (Note 1): Accrued liabilities (Note 5) 9,806,534 Finished goods and work in progress 12,670,955 Income taxes payable 4,451,429 Raw materials and supplies 10,295,858...
Calculate the current ratio and the quick ratio for the following partial financial statement for Tootsie...
Calculate the current ratio and the quick ratio for the following partial financial statement for Tootsie Roll. (Round your answers to the nearest hundredth.) Assets Liabilities Current assets: Current liabilities: Cash and cash equivalents (Note 1) $ 4,144,190 Notes payable to banks $ 752,221 Investments (Note 1) 32,453,769 Accounts payable 7,084,075 Accounts receivable, less allowances of $740,000 and $736,000 16,126,648 Dividends payable 656,607 Inventories (Note 1): Accrued liabilities (Note 5) 9,906,534 Finished goods and work in progress 12,570,955 Income taxes...
Financial Management   Beach Wear has current liabilities of 350,000 a quick ratio of 1.65, inventory turnover...
Financial Management   Beach Wear has current liabilities of 350,000 a quick ratio of 1.65, inventory turnover of 4.7, and a current ratio of 2.9. what is the cost of goods sold?
How are key performance indicators different from financial statement ratio analysis?
How are key performance indicators different from financial statement ratio analysis?
Using the below financial statements to complete the ratio analysis and statement of Cash Flow questions...
Using the below financial statements to complete the ratio analysis and statement of Cash Flow questions following the financial statements. Milky Way corp comparative Balance sheet December 31, 20XX and 20XX (Prior) Assets Current Prior Cash 1,580 1,080 Account Receivable 1,300 1,680 Inventory 12,420 12,000 Total Current Assets 15,300 14,760 Land 12,300 10,200 Equipment 11,480 9,600 Accumulated Depreciation (2,040) (1,080) Total Long-term Assets 37,040 33,480 Liabilities Account Payable 1,920 960 Salaries Payable 5,060 4,080 Total Current Liabilities 6,980 5,040 Long-term...
Section C: Calculate the following ratios using the financial statements in Section B. Follow each calculation...
Section C: Calculate the following ratios using the financial statements in Section B. Follow each calculation with a sentence explaining what the ratio tells you about the business: ROCE Current Ratio Acid Test Gearing Ratio There is a maximum of 20 marks available for this section, 2 marks for the correct calculation and 3 marks for the explanation for each ratio. Ratio formulas: Return on Capital Employed = Operating Profit / Total Assets minus Current Liabilities x 100 Current Ratio...
1. Current ratio is measured by Current assets / Current liabilities. Assume current ratio is greater...
1. Current ratio is measured by Current assets / Current liabilities. Assume current ratio is greater than 100% (or 1:1) and that cash balance remains positive at all times. State the effect the following event occurring on the reporting date would have on this ratio. EVENT: Receipts from unearned revenue 2. A company reports Non-controlling interests within the equity section of its consolidated statement of financial position. Which of the following statements is correct? Group of answer choices a. No...
Walmart company research project. what's financial statement and ratio analysis for Walmart company.?. research on this...
Walmart company research project. what's financial statement and ratio analysis for Walmart company.?. research on this topic.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT