Ratios Notes

It also signals financial difficulty the quick ratio

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Unformatted text preview: s, accrued taxes, wages accrued & other accrued expenses. 4. If this ratio decreases, the firm can get in a CF problem. It also signals financial difficulty. The Quick Ratio – Ability to Meet Short ­term Obligations: 1. (Current assets – inventories)/current liabilities Asset Management Ratios (104) Asset Management Ratios measures how effectively the firm is managing its assets. Evaluating Inventories: The Inventory Turn Ratio 1. Inventory turn = Sales/inventories 2. If slow compared to other firms in the same industry… • Could have obsolete or old inventory not worth what it is being carried on...
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