English Deutsch Français Italiano Español Português 繁體中文 Bahasa Indonesia Tiếng Việt ภาษาไทย
All categories

3 answers

In my opinion it's any ratio that shows liquidity. You can have a great income statement and be cash poor. Lack of liquid cash is what ultimately kills a company.

2006-12-10 11:23:07 · answer #1 · answered by Anonymous · 0 0

It all depends on who is looking at them. If lenders are analyzing financial statments for a corporation, they are concerned with all ratios, especially coverage and liquidity ratios because that is what the company has to pay back current debt. If you're a potential stockholder, you might look at dividend ratios and profitability ratios to see how well the company performs. Or if you're actually working for the company you'd want to look at everything to see where you need improvement. The easiest "snapshot" is given by the current ratio, which compares current assets to current liabilities, and the quick ratio, which shows the most liquid assets, like cash and marketable securities) instead of the current assets. It all depends on what you're trying to find out. On top of this you have to keep in mind that acceptable ranges of ratios are different for every type of company. A wholesaler might have a huge inventory while a restaurant has almost none because they provide a service. So I guess you could say that all the ratios are important because they all tell you something different.

2006-12-10 19:27:16 · answer #2 · answered by candy 2 · 1 0

Return on Net Assets
Return on Invested Capital
Free Cash Flow Per Share
Current Ratio.
Debt-To-Equity

2006-12-10 20:15:56 · answer #3 · answered by ? 6 · 0 0

fedest.com, questions and answers