101 Ways to Score Higher on Your Series 7 Exam: What You Need to Know Explained Simply by Fleur Bradley

Author:Fleur Bradley
Language: eng
Format: epub
Tags: Series 7, test, tips, passing, exam, questions, prepare, practice questions
Publisher: Atlantic Publishing
Published: 2012-07-23T00:00:00+00:00

Ratios

To compare two or more different companies and the risk involved when investing in their stocks, there are ratios Series 7 expects you to be able to calculate. This book will list them here; your exam questions will give you the values to use when computing your answers.

First, you must understand liquidity ratios. Determining a company’s liquidity is important, as liquidity affects growth, profitability, and credit rating.

You should be familiar with these liquidity ratio formulas:

Current ratio : current assets/current liabilities

Quick asset ratio : (current assets - inventory)/current liabilities

Acid test ratio : (cash + marketable securities)/current liabilities

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