Unformatted text preview: measure your ability to pay off obligations. The answer should always be yes for a noprofit and should be close to the number of assets you have. This is where current ratio comes from, which is 1:1. Current ratio says that for every $1 in liabilities, you should have an offsetting $ in assets. Liquidity basically refers to how quickly the assets can be turned into cash. Lines (45-53) current assets Line 60-63 current liabilities Quick Ratio or acid test subtracts the inventories from current assets b/c they are not easily convertible to cash. (Line 45-53)-Line 52 current assets-inventories Line 60-63 current liabilities Days Cash Ratio looks at the cash on hand and determines how long the nonprofit can survive if cash flow is stopped. Banks look at this number to see if its less than a yr. Current assets-liabilities = x X ___ = 365...
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This note was uploaded on 08/29/2011 for the course PUBLIC ADM 101 taught by Professor Staff during the Spring '11 term at UNF.
- Spring '11