Liquidity Ratio

LIQUIDITY RATIO dimension analysis expresses the affinity among selected items of pecuniary rehearsal data. Liquidity proportion is one of the three ratios, it measures short-run magnate of the company to pay its maturing obligations and to beseeming unexpected demand for bullion. beatnik the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash. Short-term creditors such as bankers and suppliers be particularly interested in assessing liquidity. dimensions include the authoritative ratio, the new cash debt coverage ratio, the dues overturn ratio, the average army period, the register turnover ratio, and average days in inventory. Current Ratio - Expresses the relationship of authoritative assets to original liabilities. puzzle 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 dollar of current liabilities, Kell ogg has $0.67 of current assets. Cash Debt reporting Ratio - Because it uses cash pictured by operating activities, it may provide a better government agency of liquidity. Calculate the ratio for Kellogg for 2007 and 2006 Is the coverage adequate? Probably so. Kelloggs coverage is better than that of public move, and it approximates a commonly accepted threshold of .40.

Receivables Turnover Ratio Measures the number of times, on average, a company collects receivables during the period. Calculate the ratio for Kellogg for 2007 and 2006. How does Kelloggs turnover comparison to General Millss? The turnover of 11.9 times compares favora! bly with the industry average of 11.5 times, only is lower than General Millss turnover of 13.3 times. second-rate Collection Period Converts the receivable turnover ratio into days. Calculate the exhibition period for Kellogg for 2007 and 2006. How telling is Kelloggs credit and collection policies? General rule - collection period should not greatly exceed the credit term...If you demand to get a plenteous essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper