# Quick ratio is the businesses cash plus the accounts

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Quick Ratio is the businesses cash plus the accounts receivable (quick assets) divided by current liabilities. \$92,000 + \$21,000/\$26,000 = 4.3 Profitability ratios show how good a company is at making money. An example of this is the profit margin ratio it shows how much profit a company earns compared to its sales. Profits divided by sales. Profitability Ratio is profit divided by sales. \$96,000/\$21,000 = 4.6 Solvency ratios show a business ability to pay off their long-term debts or long term financial obligations. I done some research on my own and came

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up with three different solvency ratios used to measure the solvency of a company. Debt Equity Ratio is debt divided by equity. \$90,000/\$150,000 = .6 Total Asset to Debt Ratio is the total assets divided by the debt. \$272,000/\$90,000 = 3.02 Proprietary Ratio is the equity divide by the total assets. \$156,000/\$272,000 = .6 What is your conclusion about the solvency and efficiency of the company? The conclusion I draw about the solvency of the ABC company is that the business’s overall health seems well from the numbers assessed in these different ratios. I would conclude that ABC operates within reasonably enough effectiveness that they are solvent as a business and should be able to pay off their long-term debts without being driven under, although I am not certain because I did have some trouble accessing the national comparison data from the website for the last question in this assignment.
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