How to Interpret Current Ratio and Quick Ratio
The quick ratio is stricter than the current ratio because it excludes less liquid accounts such as inventory. The current ratio is a financial ratio to measure liquidity by considering all short-term assets and liabilities. Current Ratio Formula Meaning Example Interpretation Financial Ratio Current Ratio Interpretation of the Quick Ratio. . Quick ratio formula. Interpreting the Quick Ratio. In simple terms it measures the. And at the same time increase sales so that the cash on hand or AR increases. You will need to divide the companys current assets by their current. Lets imagine that your fictional company XYZ Inc has 15000 in current assets and 22000 in current liabilities. Adding on to the quick ratio formula the current ratio includes inventory. Con gnp gnp1 Df LogLik Df Chisq PrChisq 1 5. To calculate the current ratio add up all of your firms current assets and divide them with the total current l