2019 NIGA CERTIFICATION COURSE
FINANCIAL HEALTH (LIQUIDITY)
31
(c) 2019 - N WADDELL, CPA, CGMA, PROFESSIONAL CORP.
Short-term liquidity
Current assets Current liabilities
Current ratio =
**CR < 1 = Indicates there are less current assets available to pay current obligations.
31
FINANCIAL HEALTH (LIQUIDITY)
32
(c) 2019 - N WADDELL, CPA, CGMA, PROFESSIONAL CORP.
Short-term liquidity
Cash + Current marketable securities + Receivables Current liabilities
Quick ratio =
**QR < 1 = Indicates there are less “liquid” assets available to immediately pay current obligations.
32
(c) 2019 - N WADDELL, CPA, CGMA, PROFESSIONAL CORP.
16
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