The Accounts Receivable To Workingcapital Ratio

The Accounts Receivable To Workingcapital Ratio

a problem on financial accounting The accounts receivable to working capital ratio for Liberty Medical Group is-0.67, which compared to the baseline of -0.59 indicates that the company's performance is sufficient in this area.Inventory to Working Capital Inventory / (Current Assets - Current Liabilities)This ratio measures the dependency of working capital on inventory. A lower number for this ratio is preferred indicating that a company has a satisfactory level of working capital and inventory makes up areasonable portion of current assets.The inventory to working capital ratio for Liberty Medical Group is -0.06, which compared to the baseline of -0.06 indicates this ratio is in line with company goals.Long Term Liabilities to Working Capital Long Term Liabilities / (Current Assets - Current Liabilities)This ratio measures the degree to which a company's long-term debt has been used to replenish working capital versus fixed asset acquisition.The long-term liabilities to working capital ratio for Liberty Medical Group is-1.67, which compared to the baseline of -1.39 indicates the value of this ratio is meeting the company's expectations.14 Financial Analysis CS: Sample Reports Liberty Medical Group Detailed Ratio Analysis - Two-Year Comparison Sales to Working Capital Sales / (Current Assets - Current Liabilities)This ratio measures a company's ability to finance current operations. Working capital (current assets -current liabilities) is another measure of liquidity and the ability to cover short-term obligations. This ratio relates the ability of a company to generate sales using its working capital to determine how efficiently working capital is being used. In general, a lower number is preferred because it indicates a company has a satisfactory level of working capital. However, an exceptionally low number may indicate inadequate sales levels are being generated.