5 ratios - Peter Bowles Nick Mona The meaning of Five...

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Peter Bowles Nick Mona The first ratio that I chose was the Cash Ratio . The Cash Ratio is a measure of the company’s liquidity. This ratio can help tell how accessible and available cash is to a company. It measures how much cash a company has on hand at the time that it is calculated. A high cash ratio is good to a certain extent. For example if a company has a high cash ratio, then they will have cash available for emergency purposes. But on the other hand a company doesn’t want a lot of extra cash laying around because cash should be invested into the company. In 2006 Walgreens had a ratio of 0.16 and CVS had a ratio of .076. Although Walgreens has a higher ratio than CVS this ratio is usually not considered a good measure of the company’s financial position. The second ratio that I interpreted was the Gross Profit Percentage . The Gross Profit Percentage “measures how much of every sales dollar is gross profit”. It shows the
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5 ratios - Peter Bowles Nick Mona The meaning of Five...

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