What Does Current Ratio Mean?

What Does Current ratio Mean?
A liquidity ratio that measures a companys capacity to pay short-term obligations.

The Current Ratio formula is:

What Does Quick Ratio Mean?
An indicator of a companys short-term liquidity. The quick ratio measures a companys ability to gratify its short-term obligations with its most liquid assets. The higher the quick ratio, the recrudesce the position of the company.

The quick ratio is calculated as:

What Does Receivables overthrow Ratio Mean?
An accounting measure used to appraise a firms effectiveness in extending credit as tumesce as collecting debts. The receivables turnover ratio is an activity ratio,  meter how efficiently a firm uses its assets.

Formula:

summation derangement
What Does Asset Turnover Mean?
The amount of sales generated for every dollars expenditure of assets. It is calculated by dividing sales in dollars by assets in dollars.

Formula:

 

Also known as the Asset Turnover Ratio.

The debt ratio compares a companys total debt to its total assets, which is used to adopt a general idea as to the amount of leverage being used by a company. A disordered percentage means that the company is less dependent on leverage, i.e., money borrowed from and/or owed to others. The lower the percentage, the less leverage a company is using and the stronger its equity position.



In general, the higher the ratio, the to a greater extent risk that company is considered to have taken on.

Formula: 

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Components:
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What Does Fixed-Charge reportage Ratio Mean?
A ratio that indicates a firms ability to satisfy fixed financing expenses, such as hobby and leases. It is calculated as the following:

Investopedia explains Fixed-Charge Coverage Ratio
For example, since leases are a fixed charge, the calculation determining a companys ability leases would be (EBIT + Lease Expenses) / (Lease Expenses + Interest).

Gross Profit Margin
Although we are only a few lines into the income statement, we can already calculate...If you want to get a full essay, order it on our website: Orderessay



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