Accounting
CURRENT RATIO The most common ratio using current-asset and data is the current ratio, which is current assets divided by current Recall the makeup of current assets and current liabilities. Inventory is to receivables through sales, the receivables are collected in cash, and the cash is used to buy inventory and pay current liabilities. A company's current assets and current liabilities represent the core of its day-to-day operations. The current ratio measures the company's ability to pay current assets with current liabilities. Generally a higher current ratio indicates a stronger financial position. A higher current ratio suggests that the business has sufficient liquid assets to maintain normal business ACID-TEST RATIO The acid-test (or quick) ratio tells us whether the entity could pay all its current liabilities if they came due immediately. ÷ That is, could the company pass this acid test? To do so, the company would have to convert its most liquid assets to cash. To compute the acid-test ratio, we add cash, short-term investments, and net current receivables (accounts and notes receivable, net of allowances) and
compute the ratio.) This ratio shows the percentage of each sales dollar BOOK VALUE PER SHARE OF COMMON STOCK. Book value per share of common stock vestment in the company-how much income is earned for every $1 invested by sales by average net accounts receivable. The resulting ratio indicates how this ratio, we divide in come from operations by interest expense. This
Some common words found in the essay are:
INVENTORY TURNOVER, ACID-TEST RATIO, CURRENT RATIO, STOCKHOLDERS' EQUITY, DEBT RATIO-tells, NET SALES, STOCK Earnings, TIMES-INTEREST-EARNED RATIO, TOTAL ASSETS, Accounts Receivable, net income, stockholders' equity, accounts receivable, current liabilities, rate return, common stock, net sales, current ratio, debt ratio, share common stock, common stockholders', common stockholders' equity, income available common, return net sales, assets current liabilities,
Approximate Word count = 1448
Approximate Pages = 6 (250 words per page double spaced)
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