Reading Financial Reports For Dummies (For Dummies (Business & Personal Finance)) by Lita Epstein

Author:Lita Epstein [Epstein, Lita]
Language: eng
Format: mobi
ISBN: 9781118761939
Publisher: Wiley
Published: 2013-12-12T14:00:00+00:00

Calculating the quick ratio

Here's the two-step process you use to find the quick ratio:

Determine the quick assets. Quick assets = Cash + Accounts receivable + Short-term investments

Calculate the quick ratio. Quick assets ÷ Current liabilities = Quick ratio or acid test ratio

Using information from Mattel's and Hasbro's balance sheets, I take you through the two-step process. Note: I added only two figures to find the quick assets for Mattel and Hasbro because both companies combine cash and short-term investments or marketable securities on their balance sheets.

Mattel

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