Which of the Following Is Not a Liquidity Ratio

- April 16, 2022

ROE Return on Equity is a profitability ratio whereas all others are liquidity What are the example of liquidity in globalization. 1 Which of the following ratios is not a liquidity ratio.

How To Calculate Acid Test Ratio Overview Formula And Example

Operating Cash Flow Ratio Current Liabilities Operating Cash Flow.

. The amount of a companys working capital is also cited as an indicator of liquidity. A Solvency ratio b Liquidity ratio. Which of the following is not a solvency ratio.

Liquidity ratios are important to investors and creditors to determine if a company can cover their short-term obligations and to what degree. 4Which of the following is not a characteristic evaluated in ratio analysis. The quick ratio is calculated by dividing the most liquid of current assets by current liabilities.

Hence the inventory turnover ratio and the accounts receivable turnover ratio can provide insights as to a. The following data were reported by Universe Company at year-endTotal assets525000Quick assets105000Noncurrent assets375000Current liabilities75000Long-term liabilities75000Common stock par 10170000Total stockholders equity375000Calculate each of the following ratiosA. Liquidity ratios are essentially solvency ratios meaning if a company does not meet the ideal liquidity ratio requirement it may teeter on the edge of bankruptcy.

It should include a current asset or current liability. Which of the following is NOT a correct way of calculating a liquidity ratio. A Debt equity ratio.

Which of the following is NOT a correct way of calculating a liquidity ratio. Question See full Answer. Service firms that tend not to carry too much inventory will see significantly higher quick ratios than current ratios.

Creditors and investors like to see higher liquidity ratios such as 2 or 3. Liquidity ratios measure a companys ability to pay debt obligations and its margin of safety through the calculation of metrics including the. C- Operating Cash Flow Current Liabilities Operating Cash Flow.

October 19 2021 thanh. Which of the following is not a measure of liquidity. Net Working Capital Ratio.

Which of the following is a capital structure ratio. Inventory being not very liquid is subtracted from total current assets to determine the most liquid assets. Which of the following statements regarding ratio analysis associated with balance sheets is correctQuestion 13 optionsLiquidity analysis analyzes whether a firm can recover from a loss or lossesSolvency analysis analyzes whether a firm can meet its financial obligationsProfitability analysis concerns return on capital.

D Current cash debt coverage. Which among the following is the objective of ratio analysis. Choices a b -accurate and meaningful.

A current ratio b asset turnover c inventory turnover d receivables turnover. Good financial reports have which of the following characteristics. Current Ratio Total Current Assets Total Current Liabilities.

Days cash on hand. Question 00217950 Subject Finance Topic Finance Tutorials. However a company with a large amount of inventory that is difficult to sell may have a large amount of working capital and a favorable current ratio but may not have liquidity.

A They measure the ability of the firm to meet short-term obligations with short-term assets without putting the firm in financial trouble. B- Liquidity Ratio Liquid Assets Short-term Liabilities. The correct option is asset turnover ratio Which of the following is not a liquidity ratio.

A well-established business must have a steady cash flow to remain profitable. Quick Ratio also known as Acid Test Ratio. An organizations long-term liquidity.

Which of the following is NOT an operating indicator. 03082016 0743 PM Due on. Therefore the liquidity ratio does not include the earnings per share and dividends per share.

A- Current Ratio Total Assets Total Current Liabilities. Quick Ratio Current Asset - Inventories - Prepayments Current Liabilities. 3500 Posted By.

B There are two commonly used ratios to measure liquidity current ratio and quick ratio. Current Ratio or Working Capital Ratio. The liquidity ratio does not include completely the stockholders equity liability and fixed asset.

Operating Cash Flow Ratio Current Liabilities Operating Cash Flow Current Ratio Total Current Assets Total Current Liabilities Liquidity Ratio Liquid Assets Short-term Liabilities. A Debt to assets ratio. Which of the following is NOT a correct way of calculating a liquidity ratio.

A Debt to assets ratio. Which of the following is NOT true of liquidity ratios. A Business Has The FollowingFixed Assets 6000Current Assets 2000Inventory 1000Current Liabilities 500Calculate Its Current Ratio 4 Liquidity Ratios DRAFT 9th -.

There are following types of liquidity ratios. The liquidity ratio determines if the company is making a profit or not. In the computation of earnings per share and dividends per share they are not used.

Quick Ratio Current Asset Inventories Prepayments Current Liabilities. Let us know more in detail about these ratios. Cash Ratio also known Cash Asset Ratio or Absolute Liquidity Ratio.

D All of the above. Which of the following is not a correct way of calculating a liquidity ratio. A ratio of 1 is better than a ratio of less than 1 but it isnt ideal.

C Total asset to debt ratio. Choices b c.

Liquidity Ratios Accounting Play