Pacificorp Liquidity Ratios

Owing to the fact that PacifiCorp is a private firm that is why there is not enough information available to do a detailed valuaton of the company. However, the current ratio of the company is found to be more than 1 which shows a positive outlook. Current Ratio is a liquidity ratio and measures the ability of a firm to pay its Current (Short term) liabilities with its Current (Short term) assets. A ratio of greater than 1 would indicate availability of more current assets per unit of current liabilities. A ratio of less than 1 is considered to be risky as the firm will face problems meetings its short term obligations. For some industries the minimum has to be even more than 1 to be considered safe.
In addition to this, the company has a good return on equity which increases the value of the company for the investors. This ratio is the most …show more content…
There are too many of the ratios that can be used to get too many different kinds of information. Such as, liquidity ratios are used to measure liquidity position of the company that can be of great use to banks and other potential lenders of the company, leverage ratios are used to measure long term solvency of the company, turnover ratios can used to measure operational efficiency of the company and profitability ratios help to measure profitability of the company that owner, management and many other agents of the company are concerned with.
Risk management and the control environment have a key part to play in preventing fraud. They set the moral tone of an organisation and influence the control consciousness of the firm. Ultimately, the ethics and values of the firm are reflected in its attitude to controlling financial crime and this in turn determines the level of integrity exhibited by staff and senior