Business > CASE STUDY > ratios.docx ACCB/543 Ratios University of Phoenix Ratios We utilize ratios every da (All)

ratios.docx ACCB/543 Ratios University of Phoenix Ratios We utilize ratios every da

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ratios.docx ACCB/543 Ratios University of Phoenix Ratios We utilize ratios every day, we may be aware of when we are using them, or it could be another action that is just a part of our daily l... ife. This just goes to show how important ratios are when it comes to calculating data put forth. In the financial world it can be the defining factor for a business. There are three ratios that I utilize daily to ensure that my company stays strong and competitive within the market and I™m pretty sure that you will see the importance in them as well. Debt Ratio Debt ratio measures the drivers within a company to interpret the total debt to total assets. I use this information when my company is looking to gain additional funds for a project such as building a new clinic or refurbishing a building to suit a new business venture. For example, we are currently in talks about opening our own lab. We know that it is going to take additional funds to make this happen. So, to ensure that we can secure those extra funds we must ensure that our debt ratio is not high in order to not be underwater with our total debt. The formula to calculate debt ratios is shown below. Debt ratio = Total debt / Total Assets Acid Ratio Test The second ratio that I want to introduce is the acid ratio test, it is also known as the quick ratio. This allows a person to analyze and measure the liquid of a company by calculating how the current assets are covering the current liabilities. This is another great examp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . . [Show More]

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