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Liquidity Ratios (Liquidity Ratios (Working Capital Ratio (Working Capital…

- - - - Anything below 1 indicates negative working capital
      - Anything over 2 means the company is not investing excess assets
      - Most believe a ratio between 1.2 and 2.0 is sufficient
  - - - Excludes inventories from current assets
      - Measures the dollar amount of liquid assets available for each dollar of current liablities
      - The higher the quick ratio, the better the company's liquidity position
- - - - Current assets/current liability
    - - (Current assets-inventories)/Current liabilities