Solvency ratios assess a company's debt repayment ... receivable and accounts payable affect cash flow, look at a few examples, and do some simple math. Long-term investors are interested in ...

Ratios of 1 or higher indicate short-term solvency. Because the current ratio ... The current ratio assumes, for example, that inventory will always be turned into cash within a year.

Example using quick ratio Let's say you own a company that ... This liquidity ratio can be a great measure of a company's short-term solvency. As an investor, you can use the quick ratio to ...

For example, the current ratio may indicate sufficient ... its financial situation and force it into bankruptcy. Solvency Ratios vs. Liquidity Ratios In contrast to liquidity ratios, solvency ...

A quick ratio of 1 or above indicates short-term solvency, or the ability of a company ... Returning to the example above, let’s take a look at how Apple’s current ratio (as of March 27th ...