How to Interpret Current Ratio and Quick Ratio
You will need to divide the companys current assets by their current. However interpreting both is the same where the higher the ratio. Current Ratio Formula Meaning Example Interpretation Financial Ratio Current Ratio While Janes current assets total 28100 on her balance sheet when calculating the quick ratio you only want to include liquid assets which would be cash in the amount of. . In simple terms it measures the. A quick ratio of 11 is considered a breakeven point in terms of liquidity. The current ratio formula requires just two numbers both of which are found on the balance sheet. Quick assets cash and cash equivalents. It is the loosest ratio among other liquidity ratios such as. Quick Ratio 15000 10000 15. It means the earnings per share of the company is covered 10 times by the market price of its share. This is still considered to be a good ratio. The acid test ratio analyzes the total of cash...