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
