Personalized Christmas Online » frederickt20 http://www.personalizedchristmas.net ... everything about Personalized Chrismas! Wed, 21 Nov 2012 22:03:34 +0000 en hourly 1 http://wordpress.org/?v=3.1.4 Bed Linens Company and Cover Covers Corporation Research – Financial Percentages Related to Liquidity http://www.personalizedchristmas.net/bed-linens-company-and-cover-covers-corporation-research-financial-percentages-related-to-liquidity_151635.html http://www.personalizedchristmas.net/bed-linens-company-and-cover-covers-corporation-research-financial-percentages-related-to-liquidity_151635.html#comments Mon, 30 Jul 2012 18:23:05 +0000 frederickt20 http://www.personalizedchristmas.net/?p=151635 The general purpose of most businesses is to make a satisfactory return on invested funds, consistent with keeping a sound financial condition. There are at least two facets of a sound economic condition:( 1) ability to meet current obligations (liquidity )( 2) ability to meet interest expenses and payment schedules linked with long-term obligations (solvency ).Liquidity ratios need to do with the size and interactions of current liabilities, which are the obligations quickly coming due, and current assets, which presumably provide the foundation from which these obligations will be achieved. So that it may meet its current liabilities fixed assets are usually harder to convert into cash.It is very important that a small business have enough of current assets. For example, other considerations being equal, a company whose current assets are three times as large as its current liabilities may possibly be more in a position to meet its current liabilities within an emergency than an organization whose current assets are two times its current liabilities.The first test of liquidity is the current ratio, that is obtained by dividing the total of the current assets by the total of the current liabilities. In case of Quality Bed Linens Company the mentioned ratio was 2.3 on December 31, 2008 and 2.4 on December 31, 2009.There is really a guideline that the existing ratio must be at the very least 2 to 1. However, this is a very rough rule, because the existing ratio doesn’t reveal the quality of the assets creating it.Assets that are easily turned in to money are sometimes called liquid assets and because the patterns of industries change. The current rate is an examination of the amount of liquid assets in accordance with the amount of current liabilities.Some current assets are more liquid than others. Catalog, for instance is less water than cash.Bed Linens Company features a current rate of 2.0. Cover Tops Corporation has the same ratio of 2.0. Most of Canopy Tops Corporation’s current assets are cash and government bonds, while most of Bedding Company’s are in supply. Which organization has more liquid assets? Of course the current ratio test is Canopy Tops Corporation.Evidently, we are told by the current ratio test in regards to the relative amount of current assets, not their relative liquidity.A organization with an extremely substantial amount of current assets might not be making successful usage of its methods. This type of business may have a high current rate. Thus, the aforesaid ratio that’s very high isn’t necessarily good.

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