Liquidity ratios reflect the company’s ability to pay its bills, debts and commitments. The more liquid the company is, the more cash it has to finance its operations. By analyzing the financial reports and looking at the liquidity of the company we can determine if the company can meet its short-term commitments by liquidating the short-term assets, which is really important to creditors and investors.
One of the first ratios used to determine and analyze Wendy’s liquidity and compare it against Sonic Drive-In is the current ratio. A general rule of thumb is that as long as the current ratio is one or above then the company has the ability to pay off its debts and short-term commitments. By looking at the current ratio for Wendy’s we can
One of the first ratios used to determine and analyze Wendy’s liquidity and compare it against Sonic Drive-In is the current ratio. A general rule of thumb is that as long as the current ratio is one or above then the company has the ability to pay off its debts and short-term commitments. By looking at the current ratio for Wendy’s we can