ACC 561 W Holding - Financial Ratios for W Holding...

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Financial Ratios for W Holding LIQUIDITY Current Ratio Current ratio = Current assets / Current liabilities Here is W Holding’s 2007 current ratio: Current ratio = $17,549,294/$16,318,403 = 1.08 times Current ratio reflects the short-term liquidity of the company. It is 1.08 in the case of W. Holding for the first quarter of 2007 which says that it has 1.08 times in current assets to cover $1 of current liabilities. Quick Ratio It is also known as Acid test ratio. Acid test ratio = (Cash + Accounts Receivable + Short-term Investments)/ Current liabilities = (Total Assets- Inventories)/ Current liabilities = ($17,549,294- $125,866) /$16,318,403 = $17,423428/$16,318,403 = $1.06 It is short-term measurement of company to meet its current obligations without selling any of its inventories.
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LONG-TERM SOLVENCY MEASURES It is long-term ability of company to meets its obligation which is also known as financial leverage ratio. Total Debt Ratio
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This document was uploaded on 05/10/2011.

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ACC 561 W Holding - Financial Ratios for W Holding...

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