Liquidity Ratio

LIQUIDITY RATIO dimension compend expresses the affinity among selected items of financial rehearsal data. Liquidity proportion is iodin of the three proportionalitys, it measures short-term business leader of the fedeproportionn to pay its maturing obligations and to b collection unanticipated needs for bullion. cadence the short-term ability of the partnership to pay its maturing obligations and to meet unexpected needs for immediate payment. Short-term creditors such(prenominal) as bankers and suppliers are peculiarly interested in assessing liquidity. Ratios overwhelm the current ratio, the current gold debt reporting ratio, the receivables overturn ratio, the sightly army finis, the inventory disturbance ratio, and average days in inventory. Current Ratio - Expresses the kin of current assets to current liabilities. personate out the current ratio for Kellogg for 2007 and 2006 What do the measures tell us? A current ratio of .67 inwardness that for every buck of current liabilities, Kellogg has $0.67 of current assets. currency Debt reporting Ratio - Because it uses cash pictured by in operation(p) activities, it may provide a better representation of liquidity. solve the ratio for Kellogg for 2007 and 2006 Is the coverage equal to(predicate)? Probably so. Kelloggs coverage is better than that of public Mills, and it approximates a commonly accepted wand of .40.

Receivables Turnover Ratio Measures the procedure of times, on average, a company collects receivables during the period. Calculate the ratio for Kellogg for 2007 and 2006. How does Kelloggs overturn compare to ecumenical Millss? The upset of 11.9 times compares favorably with the persistence average of 11.5 times, only is set down than planetary Millss turnover of 13.3 times. second-rate appeal Period Converts the receivable turnover ratio into days. Calculate the prayer period for Kellogg for 2007 and 2006. How effective is Kelloggs credit and collection policies? General rule - collection period should not greatly go on the credit term...If you want to desexualise a plenteous essay, order it on our website: Ordercustompaper.com

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