Cash is as liquid as it gets.
No, "liquid" assets and investments are those MORE EASILY converted into cash. The term "liquidity" refers to the relative ease and speed with which investments can be "liquidated" (turned into cash or its equivalent), either to remain cash or be placed into another investment.
Quick ratio is a measure of company's ability to meet short term obligation with liquid assets. Quick ratio= (current assets â?? inventories) / current liabilities. While current ratio also called liquidity ratio measures the ability of a company to pay short term obligations. It is calculated as: Current Ratio= Current Assets / Current Liabilities.
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Word has it that the price of Pier 1 stock is not a true indicator of the company's financial condition. It has more to do with actual cash flow and it has been indicated Pier 1 has considerable cash flow, in addition to more brand appropriate merchandise that is appearing in the stores Pier 1 expects to survive and, as the economy turns around, even prosper. Confidence is high!
However the long term decrease in liquidity since the late 1960's can be traced to more efficient inventory management practices such as just in time, point of sale, and other methods of inventory management; it can also be traced to electronic cash flow transfer systems and the ability to sell accounts receivable through the security of assets.
Merchandise inventory is more liquid than store equipment. Merchandise inventory can change daily and be readily sold where equipment does not change daily and is not normally sold unless it is being replaced or the company is going out of business.
More liquid than prepaid expenses
No according to my test reviews and checking the order in the statements
Probably because cash is fungible (mutually interchangeable and inventory is not.
Inventory management concerns the control and flow of merchandise inventory. Usually computerized, inventory management keeps track of the amount of product on hand and the amount sold and it sometimes will automatically order more merchandise as needed. It is a way of optimizing sales.
Days of Inventory On HandDefined: This calculation tells you that if you were to stop ordering merchandise, how soon would you have an empty building. Of course, that idea is incorrect because some of the merchandise is being reordered very frequently while other items may be such slow sellers that you order only one per year. This calculation gives another indication of inventory turn. With a smaller number, it is expected that your inventory is not very old, and that more of it is in saleable condition. It also represents a business that is in a more liquid position. Computed:Days of Inventory On Hand is calculated by first dividing the cost of goods sold by 360. Then divide the current inventory by the number you have just obtained with the first step. Days of Inventory On HandDefined: This calculation tells you that if you were to stop ordering merchandise, how soon would you have an empty building. Of course, that idea is incorrect because some of the merchandise is being reordered very frequently while other items may be such slow sellers that you order only one per year. This calculation gives another indication of inventory turn. With a smaller number, it is expected that your inventory is not very old, and that more of it is in saleable condition. It also represents a business that is in a more liquid position. Computed:Days of Inventory On Hand is calculated by first dividing the cost of goods sold by 360. Then divide the current inventory by the number you have just obtained with the first step.
By definition, cash is the most liquid.
A debit entry as an adjusting entry for merchandise inventory increases the inventory account, reflecting a rise in the amount of stock available for sale. This adjustment typically occurs when physical inventory counts reveal discrepancies, such as underreported inventory levels or additional stock acquired. By debiting inventory, the financial statements present a more accurate representation of the company's assets and overall financial health.
buy Nexon Cash. Then go the Cash shop. Then buy more room for lots of money.
The cash operating cycle is a function of how quickly you pay your accounts payable, how quickly you sell your inventory, and how quickly you collect your sales (accounts receivable):Cash operating cycle = Average days' inventory + Average days' accounts receivable - Average days' accounts payable.To reduce the cash operating cycle:sell inventory more quickly,collect sales/accounts receivable more quickly orpay accounts payable more slowly.
No, "liquid" assets and investments are those MORE EASILY converted into cash. The term "liquidity" refers to the relative ease and speed with which investments can be "liquidated" (turned into cash or its equivalent), either to remain cash or be placed into another investment.
It will improve the working capital through better management of inventory and reduce the risks resulting from obsolete or slow moving inventory. Cash conversion cycle is the amount of time each dollar tied up in the production and sales process takes before it is converted into cash through sales to customers. Since the inventory is managed efficiently less money will be tied in this process and hence the cash cycle is shorter as compared to cases where lots of funds are tied in inventory at production and finished goods stage.