In this case both Current Assets and Current Liabilities are to be taken into consideration.
Current Assets include:
Current Ratio = Current Assets/ Current Liabilities
Current Liabilities include:
Liquid/Acid test/Quick Ratio are:
Liquid Liabilities/ Liquid Assets (or) LA/CL or Acid Test Ratio = Quick assets/ Quick Liabilities
Liquid liabilities or quick liabilities = All current liabilities except bank overdraft
Liquid Assets or quick assets = All current assets except stock
Net working Capital Ratio = Net working Capital / Net Assets
Net working capital = Current assets – Current liabilities
Cash Position Ratio = (Cash + Marketable Securities)/Current Liabilities
Solvency Ratio = Outside Liabilities/ Total Assets
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