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estors who focus on the profitability of the firm.
2) Current and Quick Ratio
A current ratio is one of the best known measures of financial strength. It is figured as shown below:
Current Ratio = Total Current Assets / Total Current Liabilities
A generally acceptable current ratio is 2 to 1. But whether or not a specific ratio is satisfactory depends on the nature of the business and the characteristics of its current assets and liabilities. The minimum acceptable current ratio is obviously 1:1, but that relationship is usually playing it too close for comfort.
A quick ratio is also named “acid test” ratio and is one of the best measures of liquidity. It is formulated to be :
Quick Ratio = Cash + Government Securities + Receivables / Total Current Liabilities
An acid-test of 1:1 is considered satisfactory unless the majority of your "quick assets" are in accounts receivable, and the pattern of accounts receivable collection lags behind the schedule for paying current liabilities.
Both of these two ratios stand at the point of the company’s liquidity stance and serve both as good indicators for credit analysts as they focus on the company’s capability to pay back its short term liabilities in time.
3) Dividend yield and dividend cover
The dividend yield or the dividend-price ratio on a company stock is the company's annual dividend payments divided by its market cap, or the dividend per share, divided by the price per share. It is often expressed as a percentage. Its reciprocal is the Price/Dividend ratio. Dividend yield is one of the most important ratios to ensure the maximum return of a dividend paying stock on its dividend distribution process.
Dividend cover is the ratio of company's earnings (net income) over the https://www.51lunwen.org/daixieassignment/2011/0701/1333198919.htmldividend paid to shareholders, calculated as earnings per share divided by the dividend per share. It is also important because it indicates the fraction the firm pays to its shareholders out of the total net income.
澳洲assignment代写These two indicators serve good reference to both equity investors and analysts-consultants in the banking/securities industry as it indicates the overall soundness of a firm’s business growth and its confidence of its future going forward.

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