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A financial ratio that measures the ability to pay current liabilities with liquid assets (cash marketable securities and receivables) is called?
Quick ratio.
Is Marketable securities considered a current asset?
yes
A firm which has a relatively large amount of cash and receivables in its current assets accounts and a relatively small amount of current liabilities would be considered?
liquid
What ratios is a measure of a company's ability to pay all current liabilities if they come due immediately?
Quick Ratio helps the company to measure the ability to pay back immediately all the liabilities if they come due. Formula Quick ratio: Quick Assets/Current Liabilities Quick Assets = Cash + Bank + Marketable Securities + Inventory Sometimes inventories not included to check absolute liquidity because inventory also need some time to realize cash
What is the main reason between current ratio and acid test ratio?
The main difference between the current ratio and the acid-test ratio lies in the assets they consider. The current ratio includes all current assets, such as inventory, while the acid-test ratio excludes inventory and focuses only on the most liquid assets (cash, marketable securities, and receivables). This makes the acid-test ratio a more stringent measure of a company's short-term liquidity, as it assesses the ability to meet current liabilities without relying on inventory sales. Thus, the acid-test ratio provides a clearer picture of immediate financial health.
A financial ratio that measures the ability to pay current liabilities with liquid assets (cash marketable securities and receivables) is called?
Quick ratio.
What assets are likely to be assessed closest to market value?
· Cash and near-cash · Account receivables · Other current assets · Marketable securities
Is Marketable securities considered a current asset?
yes
Is Inventory included in Marketable Securities?
No, inventory is not included in marketable securities. Marketable securities refer to financial instruments that are liquid and can be easily converted into cash, such as stocks and bonds. Inventory, on the other hand, consists of goods and materials a company holds for sale or production, making it a part of current assets but separate from marketable securities.
What is the purpose of a quick ratio?
Quick ratio is very important to assess the liquidity condition of company as compare to current liabilities, so that in case of emergency repayment or cash required how much money can be arrange by selling current assets like marketable securities or inventory etc.
What is the definition of a liquidity ratio?
Liquidity ratio are designed to test a company's ability to meet its short-term financial obligations. To find the ratio, you take Cash and Cash Equivalent + Marketable Securities + Accounts Receivable divided by Current Liabilities.
A firm which has a relatively large amount of cash and receivables in its current assets accounts and a relatively small amount of current liabilities would be considered?
liquid
Non current liabilities report on which section of a balance sheet?
Hi, Non current Liabilities is under the section of Liabilities Section, thus, it has to be reported under Liabilities of the balance sheet. ASSETS cash and cash equivalents xxxx trade receivables xxxxx xxxxx xxxxxx LIABILITIES and SHAREHOLDER'S EQUITY Current Liabilities: xxxxx xxx xxxxx xxx Total Current Liab. xxxx Non-Current Liablilities: xxxxx xxx xxxxx xxx Total Non-Current Liab. xxxx LIABILITIES xxxxx
Is Marketable Securities a current asset?
yes
What ratios is a measure of a company's ability to pay all current liabilities if they come due immediately?
Quick Ratio helps the company to measure the ability to pay back immediately all the liabilities if they come due. Formula Quick ratio: Quick Assets/Current Liabilities Quick Assets = Cash + Bank + Marketable Securities + Inventory Sometimes inventories not included to check absolute liquidity because inventory also need some time to realize cash
What is the main reason between current ratio and acid test ratio?
The main difference between the current ratio and the acid-test ratio lies in the assets they consider. The current ratio includes all current assets, such as inventory, while the acid-test ratio excludes inventory and focuses only on the most liquid assets (cash, marketable securities, and receivables). This makes the acid-test ratio a more stringent measure of a company's short-term liquidity, as it assesses the ability to meet current liabilities without relying on inventory sales. Thus, the acid-test ratio provides a clearer picture of immediate financial health.
If current liabilities are 7714 and total liabilities are 18187 what is the ratio of current liabilities to total liabilities?
Current Liabilities to Total Liabilities Ratio = Current Liabilities / Total Liabilities Current Liabilities to Total Liabilities Ratio = 7714 / 18187 Current Liabilities to Total Liabilities Ratio = 0.42 or 42%
