REFS is
a mine of invaluable information for the private investor.
Selecting shares without its help is like trying to
clap with one hand tied behind your back.
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Quick
ratio
This
expresses a company’s ability to repay short-term creditors,
or current liabilities, out of its most liquid assets. The quick
ratio is the result of dividing quick assets, the total of current
assets other than stocks and work in progress, by current liabilities.
It shows the number of times current liabilities are covered
by quick assets. A value greater than 1.00 indicates fully covered.
For banks and insurance companies, the quick ratio does not
apply, and the abbreviation ‘na’ appears.
Calculation:
TOTAL CURRENT
ASSESTS, LESS STOCKS & WIP
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= QUICK RATIO (r)
CURRENT LIABILITIES
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