Liquidity Ratios Flashcards
1
Q
Current Ratio
A
Current Assets / Current Liabilities = times
2
Q
Quick Ratio
A
(Current Assets - Inventories) / Current Liabilities =times
3
Q
Receivable Turnover (not included)
A
Net Credit Sales / Average Trade Receivable =times
4
Q
Average Collection Period (not included)
A
360 days / Trade Receivable Turnover = days
OR
Average Receivables / Average Daily Sales
-Average Daily Sales = Annual Credit Sales / 360 Days
5
Q
Inventory Turnover (not included)
A
Cost of Good Sold / Average Inventory =times
-AVERAGE INVENTORY = (Beg, Inventory + End. Inventory) / 2
6
Q
Average Sales Period (not included)
A
360 Days / Inventory Turnover =days
