Examples of using Quick ratio in English and their translations into Vietnamese
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Difference between Quick ratio and Current ratio. .
The difference between current ratio and quick ratio.
The quick ratio only takes into account those assets that could be used to pay short-term debts today.
The term“Acid-test ratio” is also known as quick ratio.
The quick ratio excludes inventory, which can be more difficult to turn into cash on a short-term basis.
By excluding inventory, and other less liquid assets, the quick ratio focuses on the company's more liquid assets.
If a company's financials don't provide a breakdown of their quick assets,you can still calculate the quick ratio.
A more stringent ratio is the quick ratio, which measures the proportion of short-term liquidity as compared to current liabilities.
In order to stay solvent andpay its short-term debt without selling inventory, the quick ratio must be at least 1.0 X.
As a general rule, a quick ratio greater than 1.0 indicates that a business or individual is able to meet their short-term obligations.
I assume that the risk of holding inventory was the reason for the quick ratio(also known as the acid-test ratio). .
It needs to improve its quick ratio to above 1.0 X so it won't have to sell inventory to meet its short-term debt obligations.
In this example,you performed a simple analysis of a firm's current ratio, quick ratio, and net working capital.
The quick ratio uses only the most liquid current assets that can be converted to cash within 90 days or less.
The total of all quick assets is used in the quick ratio, where quick assets are divided by current liabilities.
To strip out inventory for supermarkets would make their current liabilitieslook inflated relative to their current assets under the quick ratio.
Cash ratio is a refinement of quick ratio and indicates the extent to which readily available funds can pay off current liabilities.
This means that the firm cannot meet its currentshort-term debt obligations without selling inventory because the quick ratio is 0.529 X, which is less than 1.0 X.
However, the quick ratio is a more conservative measure of liquidity because it doesn't include all of the items used in the current ratio. .
It's important to include other financial ratios in your analysis,including both the current ratio and quick ratio, as well as others.
The quick ratio excludes inventory and some other current assets from the calculation and is a more conservative measurement than the current ratio. .
The cash ratio ismuch more restrictive than the current ratio or quick ratio because no other current assets can be used to pay off current debt- only cash.
The quick ratio, often referred to as the acid-test ratio, includes only assets that can be converted to cash within 90 days or less.
One of my personal favorite ways to generate numbers for acash flow statement is the“quick ratio” or“acid test,” which works by measuring cash and accounts receivable divided by accounts payable(or current liabilities).
The quick ratio is a measure of a company's ability to meet its short-term obligations using its most liquid assets(near cash or quick assets).
Improved financial metrics: Once inventory levels were reduced, all financial metrics that incorporate inventory levels(such as working capital required, return on assets(RONA), and quick ratios) showed improvement: working capital can be reduced as much as 15%,RONA increased as much 4%, and the quick ratio increased as much as 7%.
As a result, even the quick ratio may not give an accurate representation of liquidity if the receivables are not easily collected and converted to cash.
The quick ratio offers a more conservative view of a company's liquidity or ability to meet its short-term liabilities with its short-term assets because it doesn't include inventory and other current assets that are more difficult to liquidate(i.e., turn into cash).
The thought behind the quick ratio is that certain line items, such as prepaid expenses, have already been paid out for future use and cannot be quickly and easily converted back to cash for liquidity purposes.
A new steering column installation,re-valved power-steering pump and a quicker ratio of 15:1 compared to 17:1 on the previous model ensure the new V8 Vantage steers with even greater precision, handles with more agility and provides more feedback for a completely engaging drive.