“Cash is king.” We hear it all the time. But cash is fuel for small businesses, cash is fuel. And over 80% of businesses fail because of cash flow issues.
This means companies often strike a balance between current assets and current liabilities. You have to have enough in the bank to cover the loan payback.
How do you know you’ve got it covered? A little “quick” math can provide answers.
Specifically: The Quick Ratio and Current Ratio.
Here's what you'll learn:
- Terms you’ll need to know to calculate these ratios
- Why the quick ratio is important
- How companies use the quick ratio vs. the current ratio
- Using the quick ratio vs. current ratio for yourself
- Pros and cons of using the quick ratio or current ratio
- What to do if the quick ratio indicates a liquidity problem
- How to improve your ratios for robust financial performance