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Another Piotroski-based test of a firm's financial health: Its current ratio (current assets divided by current liabilities) for the most recent fiscal year must be greater than it was in the previous year.
While working capital is defined as current assets less current liabilities, for our purpose, it is simpler to think of it as the capital required to run the day-to-day operations of the business.
You could interpret this to mean that current assets could fund current liabilities for a little over two years.
Similar(57)
L. 109 280, § 801(d)(1), substituted "section 412(l)(8)(A), except that section 412(l)(8)(A) shall be applied for purposes of this clause by substituting '150percentt (140 percent in the case of a multiemployer plan) of current liability' for 'the current liability' in clause (i)." for "section 412(l)".
For example, imagine a company had current assets of $50,000 and current liabilities of $24,000.
For example, consider a company with current assets of $100,000 and current liabilities of $120,000.
This will give management the opportunity to buttress its already ample liquidity; cash and marketable securities exceed current liabilities by $53 million for a comfortable quick ratio of 1.8.
For current liabilities: What kind of current liabilities does Intel have?
That get-together, which typically occurs when forum members hold an annual meeting in Washington, took on some urgency as the Oct. 17 deadline loomed for increasing the debt limit so the government can maintain payments to creditors and others for current liabilities.
It observes that it has $1.2 billion in cash, but does not choose to remind us that it also has $1.187 billion in current liabilities; and that it reported losses for the quarter and the year; and that its substantial revenue increases necessarily entail increases in potential refund liabilities.
At the end of fiscal 1989, it had $2.40 in current assets for each dollar of current liabilities; by last March, it had just $1.60.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com