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6 Cards in this Set

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  • Back
  • 3rd side (hint)
Quick Ratio
(Cash + Accounts Receivable) / (Total Current Liabilities)
Shows the amount of liquid
assets (i.e., cash or assets
that can be quickly
converted to cash) on hand
to cover current debts
Current Ratio
(Total Current Assets) / (Total Current Liabilities)
Similar to the Quick Ratio,
but broader, since it
includes less liquid assets
that may be used to cover
current debts
Cash Ratio; Liquidity Ratio
(Cash) / (Total Current Liabilities)
Shows the cash on hand to
cover current liabilities
Debt to Equity
Debt/Equity
Shows the amount of
shareholders’ equity
available to cover debts
Current Liabilities to Inventory
(Total Current Liabilities) / Inventory
Shows how much a
company can rely on unsold
inventory to cover debts
Total Liabilities to Net Worth
Total Liabilities / Net Worth
Similar to the debt to equity
ratio, but broader since it
includes all the company’s
liabilities, not just debt