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Slide 1

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Liquidity ratios…read more

Slide 2

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Order the following assets in terms of their liquidity:-
Fixtures & Fittings
Motor vehicles
Money in Bank…read more

Slide 3

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Liquidity ratios
These measure how solvent a business is. How
capable it is of paying its short-term debts.
· Current ratio
· Quick ratio or acid test…read more

Slide 4

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Current ratio
Current assets = ?:1
Current liabilities…read more

Slide 5

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Current ratio
To ensure that a business could pay all their
debts as they fall due a ratio of between 1.5:1
and 2:1 would be ideal.
Why might a business be able to survive with a
ratio of less than this?
What are the implications for a business if the
ratio is significantly higher?…read more

Slide 6

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Current ratio for Apple 2005
10.3 = 2.9:1
3.5…read more

Slide 7

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Slide 8

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Slide 9

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Slide 10

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