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CH 5 Solvency Ratios
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Current Ratio
Current Assests / Current Liabilities
Quick Ratio
Cash + Market Securities + A/R / Current liabilities
Similar to the current ratio, this ratio
provides a more stringent test of a company’s solvency.
Interest coverage
Net income + tax expenses + interest expence /
Interest expense
Accounts Payable Turnover
Cost of goods sold / Average accounts payable
This ratio measures the extent to which
accounts payable is used as a form of financing.
Author
Giovanni
ID
156998
Card Set
CH 5 Solvency Ratios
Description
Ratios used to determine the solvency of a company
Updated
2012-06-03T08:52:01Z
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