Liquidity Ratios Overview
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These flashcards cover essential terms and concepts related to liquidity ratios, their calculations, and relevance in financial assessments.
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8 Terms
Current Ratio
Current Assets / Current Liabilities
Quick Ratio
(Cash + marketable securities + receivables) / Current Liabilities
Cash Ratio
Cash and Cash Equivalents / Current Liabilities
Defensive Interval Ratio
(cash + marketable securities + receivables) / Daily Cash Expenditures
Cash Conversion Cycle
Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding
Cash + Short-term Marketable Investments + Receivables
This is used to calculate liquidity ratios and represents the liquid assets available to meet liabilities.
Daily Cash Expenditures
Total cash expenditures / number of days.
Burn Rate
Monthly Operating Expenses - Monthly Revenue.
Flashcards (94)