Liquidity And Working Capital Ratios Flashcards
1
Q
Current ratio
A
Current assets
————————
Current liabilities
2
Q
Quick ratio or acid test
A
Current assets - inventory
————————————
Current liabilities
3
Q
Average receivables collection period or debtors days
A
Trade receivables
———————— x365
Credit sales
4
Q
Average payable period or creditor days
A
Trade payables
————————x365
Credit purchases
5
Q
Average inventory holding period or stock days
A
Closing inventory
————————x365
Cost of sales
6
Q
Inventory turnover
A
Cos
—————————
Closing inventory
