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Liquidity Ratios

Borrowing Ratio

Borrowing Ratio = Total Borrowings (Short-term and Long-term) / Total Equity


Current Ratio

Current Ratio = Current Assets / Current Liabilities


Net Working Capital Ratio

Net Working Capital Ratio = Net Working Capital / Total Assets

Where Net Working Capital = Current Assets – Current Liabilities


Quick Ratio (aka Acid Test Ratio)

Quick Ratio = Quick Assets / Current Liabilities

Where Quick Assets = Current Assets – Inventories – Prepayments

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