How to calculate current ratio

Under the liquidity is the ability of certain types of property to turn into cash without loss of its carrying value. Liquidity ensures timely coverage of current liabilities with current assets. The current liquidity can be determined by comparison between the most liquid assets and marketable assets with the most urgent obligations and short-term liabilities.

You will need

• Calculator, analyze the balance sheet of the enterprise (form # 1)

Instruction

1. Find the coefficient of current liquidity - KTL, which is calculated with respect to all current assets to current liabilities by the formula:KTL=(D+CB+DZ+MZ)/KO,
   where D - cash on hand and in Bank accounts;
   Securities securities (short-term financial investments);
   DZ - accounts receivable;
   MZ - material resources.
   CO - current liabilities (borrowings and payables).Or by the formula:KTL=TA/TO,where is - current assets (2nd section of the balance sheet).
2. According to the results of a calculation, set the standard value of this indicator, which shall be not less than 2.
   The current ratio shows the payment capacity of the enterprise provided not only outstanding, but also when selling, if necessary, of material circulating assets.
3. If the structure of the balance calculation results are satisfactory, then calculate the coefficient of loss of solvency in the next three months, according to the formula:KTL at the end of the year + 3/12*(KTL at the end of the year - KTL at the beginning of the year)/2,where KTL is the current ratio;
   3 - a quarter (3 months);
   12 - year (12 months).
   The standard value must be at least 1.