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The quick (or acid-test) ratio equals current assets minus inventory divided by current liabilities. This ratio is used to evaluate liquidity and is often used in conjunction with the current ratio. The difference between the current ratio and the quick ratio tells you how much inventory may be tied up in current assets. Relatively large inventories are often a sign of short-term trouble.
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Given the following information calculate the inventory for Big Show Videos Quick ratio equals 1.2 Current assets equals 12000?
Given the following information, calculate the inventory for Big Show Videos: Quick ratio = 1.2; Current assets = $12,000; Current ratio = 2.5 a) $4,800 b) $6,240 c) $7,200 d) $5,660 You can also get answer on onlinesolutionproviders com thanks
What is the meaning of a quick ratio greater than 1.0 and less than 1.0?
A quick ratio is something used in financial accounting. It is equal to your quick assets (cash and accounts receivable) divided by your current liabilities. If it is greater than 1.0 then your financial statements are looking good because you have more assets than liabilities and are therefore (hopefully) making revenue. If it is less than 1.0 than your liabilities outweigh your assets and your business could be headed for failure.
How do you calculate liquidity ratio?
You have to calculate the Quick ratio and the Current RatioQuick ratio: (cash+accounts receivables+short-term investments)/current liabilitiesCurrent ratio: Current Assets/Current liabilitiesWhoever submitted this did not answer the question fully. I don't know the answer but I see nothing here that says "Liquidity ratio =" or means the same thing. I have no idea what to do with quick ratio and current ratio....================================================================What Does Liquidity Ratios Mean?A class of financial metrics that is used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts.Common liquidity ratios include the current ratio, the quick ratio and the operating cash flow ratio. Different analysts consider different assets to be relevant in calculating liquidity. Some analysts will calculate only the sum of cash and equivalents divided by current liabilities because they feel that they are the most liquid assets, and would be the most likely to be used to cover short-term debts in an emergency.A company's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern.From Investopedia.
Why do you need Ratio?
so that i can help us through simple life skill's that we have and when we see something that could be work out in a quick way of doing we won't have to use long multiplication's
Is -41 a rational number?
1). Quick check:Any number that you can completely write with digits is a rational number.So yes, -41 is rational.2). Formal mathematical analysis:Any number that can be written as the ratio of two integers is rational.-41 is the ratio of -41 and 1.So yes, -41 is rational.
What is ideal quick ratio of a firm?
Quick ratio means
What's the formula for quick asset ratio?
1. Quick assets ratio formula Quick asset ratio = quick assets / current liabilities
quick ratio?
quick ratio analyzes whether a company can pay off its short-term obligations using its most liquid assets. the ideal quick ratio for companies is 1.50. quick ratio is calculated as follows:Quick ratio = Quick assets / Current liabilitiesQuick assets = Current assets - Inventory
What is the recommended ratio for quick ratio?
The recommended quick ratio may be 1 to 1 although care needs to be taken
What quick ratio indicates?
Quick ratio indicates company's liquidity and ability to meet its financial liabilities. Formula of quick ratio = (Current assets - Inventory)/Current Liabilities
What is ideal quick ratio?
A quick ratio of 1 is regarded as ideal and demonstrates good liquidity within the business
SDJ Inc has net working capital of 1410 current liabilities of 5810 and inventory of 1315 What is the current ratio what is the quick ratio?
I will not actually work the problem for you, however, I will give you the formula to find the current ratio and the quick ratio. Current Ratio = Current Assets / Current Liabilities The quick Ratio is Quick ratio = (current assets - inventories) / current liabilities Use the numbers you provided above to fill in the blanks and you should get the current ratios and quick ratios with no problem. / = divided by
What happens to the quick return ratio when the stroke length is reduced?
What happens to the quick return ratio when the stroke length is reduced?
What does a quick ratio smaller than the current ratio reflect?
The quick ratio smaller than current ratio reflects that how much quick your organization is, in paying short-term liabilities. That is why inventories are deducted from current assets while calculating Quick ratio. Typically, a Quick ratio of 1:1 or higher is a good and indicates, a company does not have to rely on sale of inventory to pay the short-term bills, while as current ratio of 2:1 is considered good in order to provide a shield to the inventory.
Another name for the acid test ratio is?
Other names are the quick ratio ot the liquid ratio
What is super quick ratio?
To find super quick ratio, first we have to find super quick assets and super quick assets can be found as under; Super Quick Asset = Quick Assets - Accounts Receivable (Net) Quick Assets = Current Assets - (Inventory + Prepaid Expense) Super Quick Ratio = Super Quick Assets / Current Liabilities Actually, Super Quick Assets tell the amount of money available to pay off current liabilities.
Why is the quick ratio a more appropriate measure of liquidity than the current ratio for a large-airplane manufacturer?
The quick ratio is more appropriate than the current ratio because it only factors in the assets that a business, like a large airplane manufacturer, can easily turn into cash. The quick ratio does not include inventory or land assets so is typically lower than the current ratio.
