Accounting Ratios

Cash and Cash equivalents, Trade Receivables, Inventories, Short-term investments

Current Assets include all assets that can be converted into cash within one year. These include cash, trade receivables, inventories, and short-term investments. Land and building are fixed assets, not current assets.

Current Ratio, Quick Ratio

Liquidity ratios like Current Ratio and Quick Ratio measure short-term solvency. Debt-Equity Ratio measures long-term solvency, while Gross Profit Ratio measures profitability.

Gross margin on products sold

Gross Profit Ratio shows the gross margin available on products sold. It indicates the margin available to cover operating expenses and other costs. A higher ratio is always favorable.

Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Fixed Assets Turnover Ratio, Working Capital Turnover Ratio

Activity ratios measure the efficiency of asset utilization. They include various turnover ratios like Inventory, Receivables, Fixed Assets, and Working Capital Turnover. Current Ratio is a liquidity ratio, not an activity ratio.