Relationship between current assets and current liabilities

Assignment Help Financial Management

Reference no: EM13976156

1- Current ratio = current assets/current liabilities

2- Quick ratio= (cash and cash equivalent +net receivables)/ current liabilities

3- Days cash on hand (DCOH) = (unrestricted cash and cash equivalent/ cash operation expenses/no. Of days in period (365)

4- Days receivables= Net receivables/net credit revenues/ no. Of days in period (365)

Liquidity ratio is the ratio, which sets relationship between current assets and current liabilities. It denotes excess of current assets over current liabilities. It also shows short-term solvency of the firm.

Reference no: EM13976156

Questions Cloud

Compounding on the money you save and the money : You want to have $20,000 for the down payment on a house in 10 years. Your parents have promised to give you $3,000 in two (2) years. How much do you need to set aside today if you can earn an 8% APR with monthly compounding on the money you save and..

What is the bonds current yield : Three (3) years ago the Zappa Corporation issued a 20-year, 7% annual coupon bond at a price of $1,200. If interest rates have remained unchanged what is the bond's current yield today?

Fixed-rate mortgage to buy a new home : You need a 25-year, fixed-rate mortgage to buy a new home for $255,000. Your mortgage bank will lend you the money at a 5.50 percent APR for this 300-month loan. However, you can afford monthly payments of only $950, so you offer to pay off any remai..

What is the expected capital gain or loss on the bond : You purchase a 7% annual coupon bond with a 10% yield to maturity (YTM), and a 10 year life. What is the expected capital gain or loss on the bond (as a percent) in the first year?

Relationship between current assets and current liabilities : Current ratio = current assets/current liabilities. Quick ratio= (cash and cash equivalent +net receivables)/ current liabilities. Liquidity ratio is the ratio, which sets relationship between current assets and current liabilities. It denotes excess..

Securitys price sensitivity to an interest rate change : The greater a security's coupon, the lower the security's price sensitivity to an interest rate change, ceteris paribus.

Prepare accounts-receivable aging schedule by total dollars : Millbridge Hospital receives earned income from several sources: Medicare, Medicaid, private insurance, and selfpay customers. The federal government owes the hospital $7 million, 60% is current, 30% is between 31 and 61 days old, and the remaining 1..

Millbridge earns four percent on its idle cash : Millbridge Hospital buys its supplies in bulk and has recently switched vendors. The first purchase Millbridge made was for 500 boxes of gauze at $3.46 a box. The purchase had payment terms of 2/15 N/30. Millbridge earns four percent on its idle cash..

Determine the rate of return of the additional investment : Two alternative investment proposals are under consideration for a vacant owner by Urban Development Corporation. Plan A would require an immediate investment of $120,000 and first-year expenditure for property taxes, maintenance, and insurance of $4..

User Account

All Pages