Quick RatioAnalyzing Firms
The problem with the current ratio is its inclusion of Inventory in current assets. Inventory may be qualified in its placement current assets, but it is very hard to sell at the last minute unless it’s sold at prices that destroy profit margin. Sometimes, inventory is worthless after a certain period, as it may rot, expire, or become “out of fashion” at its time of sale. The quick ratio attempts to remedy these problems.
The quick ratio removes inventory from current assets so only assets that can readily be used for payments are shown in relation to current liabilities. The quick ratio is always substantially lower than the current ratio, but you still want it to be high enough to pay down current liabilities multiple times. You should require a quick ratio minimum of one, but prefer firms with two and above. If a company sells perishables or sells goods only desirable for a short period of time after manufacture, you should prefer a higher Quick Ratio.
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International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
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