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How to study your flashcards.
Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key
Up/Down arrow keys: Flip the card between the front and back.down keyup key
H key: Show hint (3rd side).h key
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6 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Quick Ratio
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(Cash + Accounts Receivable) / (Total Current Liabilities)
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Shows the amount of liquid assets (i.e., cash or assets that can be quickly converted to cash) on hand to cover current debts |
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Current Ratio
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(Total Current Assets) / (Total Current Liabilities)
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Similar to the Quick Ratio, but broader, since it includes less liquid assets that may be used to cover current debts |
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Cash Ratio; Liquidity Ratio
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(Cash) / (Total Current Liabilities)
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Shows the cash on hand to cover current liabilities |
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Debt to Equity
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Debt/Equity
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Shows the amount of shareholders’ equity available to cover debts |
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Current Liabilities to Inventory
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(Total Current Liabilities) / Inventory
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Shows how much a company can rely on unsold inventory to cover debts |
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Total Liabilities to Net Worth
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Total Liabilities / Net Worth
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Similar to the debt to equity ratio, but broader since it includes all the company’s liabilities, not just debt |