Liquidity Analysis
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6 Terms
1
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What is liquidity?
The business’s ability to the businesses ability to pay its bills on time
2
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What is factoring?
Businesses selling their accounts receivable?
3
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How do you calculate net working capital?
current assets - current liabilities
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How do you calculate the current ratio?
current assets / current liabilities
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How do you calculate quick ratio?
current assets - inventory / current liabilities
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Does a company that sells its accounts receivable receive the total amount the customers owe it, more than that amount, or less?
Less, typically between 70 and 90 cents on the dollar
Note 
Flashcards (76)