Quick ratio and SWF: Difference between pages

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(Current assets <i>less</i> Inventories) / Current liabilities.
Sovereign wealth fund.


The quick ratio gives a very rough indication of the liquidity (or solvency) of the reporting entity.<br />
If the quick ratio were to fall below 1.0, this would indicate that the entity would not be able to meet its current liabilities out of its cash in hand and the proceeds of its other current assets (excluding inventories).
<b>Example</b><br />
Current assets (excluding inventories) = £3m. <br />
Current liabilities = £4m. <br />
The Quick ratio is: <br />
= 3 / 4 <br />
= 0.75.
The quick ratio is also known as the Acid test or the Acid test ratio.<br />
Inventories are sometimes also known as Stock.


== See also ==
== See also ==
* [[Current ratio]]
* [[Sovereign wealth fund]]
* [[Liquidity]]
* [[Wealth management]]
 
[[Category:Liquidity_management]]

Revision as of 09:37, 3 August 2018

Sovereign wealth fund.


See also