Question

Calculate these 5 Liquidity indicators from the information below: 1. Current Ratio, 2. Acid Test Ratio, 3. Net Working Capital, 4. Cash Ratio, 5. Quick Ratio

ASSETS
Cash and balances held with the banks	345
US T-bills (fully pledged)	176
Other securities	339
Reverse repos	175
Loans & leases (net)	2,148
Total assets	3,200
LIABILITIES
Demand deposits	500
Savings deposits	730
Time deposits	1,100
Total deposits	2,430
Core deposits	850
Euro currency deposits	58
Repos	217
Other money market borrowings	25

Answer 1

1	Current ratio
	Current Assets/Current Liabilities	CA=345+176+339+175	1035
	1035/2630=0.3935	CL=500+730+1100+58+217+25	2630	0.39353612
2	Acid Test ratio
	(Cash & cash equivalents+marketable securities + account receivables)/current Liabilities
	1035/2630=0.3935	1035	0.39353612
3	Net working capital
	Current Assets –Current Liabilities
	3183-2630=553	-1595
4	Cash ratio
	Cash & Cash equivalents/Current liabilities
	521/2630=0.1981	521	0.19809886
5	Quick ratio
	(Current Assets – Inventory – Prepaid expenses) / Current Liabilities
	(1035-0-0-)/2630=0.3935	0.393536122