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The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...
Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...
Liquidity ratios assess if a company can cover short-term debts with available assets. Key ratios include cash, quick, current, and operating cash flow ratios. A liquidity ratio over 1 suggests a ...
There’s no universal safe or danger level. Ideal current ratios vary by industry. A current ratio of 1.0 means the company has $1 in current assets for every $1 in current liabilities. A ratio below 1 ...
Liquidity ratios are key financial ratios used by internal and external analysts to gauge a company's liquidity, which represents its capacity to pay its existing short-term liabilities if it needs to ...
Current liabilities include short-term financial obligations due within a year. Investors should monitor companies' current ratios to assess financial strength. A current ratio above 1 indicates a ...
When a business offers credit to a favorite customer, loyalty and the desire to make the sale often play roles in the move. But one thing the financial crisis taught American businesses is that it’s ...
Financial ratios are an indicator of health for any business. They may seem esoteric, but to lenders and investors they tell the true story of a company's financial strength and ability to weather an ...