Current ratio: measure of the ability of a firm to meet its short-term obligations. 2<x<3 optimal

Quick ratio (acid-test) measure of liquidity where only liquid assets are taken into account

Cash ratio = reveals how much the cash and marketable securities the company has on hand to pay off its current obligations

Cash flow from operations ratio: indication of a company's ability to pay its ST liabilities with the cash it produces from current operations

Receivables turnover: indicator of the effectiveness of a company's credit policy. Too high = does not offer long enough creidt, too low = difficulties collecting cash

Average receivables

Average number of days receivables outstanding: same as receivable turnover except indicates as a number of days

Average inventory

Inventory turnover: efficiency of inventory utilisation. High = rapid sales, less risk of value decrease.

Average number of days in stock

Annual purchases= + -

Payable turnover

Average number of days payables outstanding

Cash conversion cycle: how many times it takes for the company to convert collection or investment into cash. High = large amount of money invested in sales in process

Defensive interval: worst-case scenario
that estimates how many days the company has to maintain its current operations without any additional days