In the analysis of economic activity of the enterprise a lot of attention is paid to liquidity indicators.This is due to the fact that the liquidity and solvency reflects the availability of a certain amount of funds that can be used for ongoing payments to suppliers and contractors.There are a number of indicators used to measure liquidity, it can be attributed to those absolute liquidity ratio.The values of this indicator are used in analytical reports, drawn up on the basis of the annual evaluation of balance sheet data.
Variety liquidity ratios calculated as the ratio of assets to the highest degree of liquidity to the obligations of the company's current activities.This economic indicator shows the size of short-term debt the company that it can pay off in the near future.When the absolute liquidity ratio shows the result in the range of 0.2 to 0.25, the value is considered to be normal.
analysis of solvency and liquidity of the balance sheet is often used to examine the possibility of concluding contracts with prospective partner companies in the short term.If we evaluate the overall balance sheet liquidity in the short term, for example, the time interval in the past three years, we can see how stable the company operates, how it changed the size of liquid assets.On the basis of these data usually decide whether to work with a supplier.
Large companies now have greater share of highly liquid assets on its balance sheet.From another point of view, the absolute liquidity ratio is the ratio of cash funds and cash equivalents to debt organization for a specific period under consideration.To understand what are the liquidity of the enterprise, it is necessary to deal with the fact that implies the concept of "liquidity" in a general sense.
For example, in the economic literature Liquidity is the ability of companies to meet their obligations on time short-term period.When an entity has the ability to quickly implement existing current assets and thus to repay its debt, it can be considered liquid.To support the absolute liquidity ratio at an appropriate level, you must have on hand the rest of the free financial resources that, if necessary, can be sent for the intended purpose.This is due to the fact that, as a rule, fixed assets are not acquired for the purpose of resale, can not be a source of debt repayment.Of the entire group of assets are considered to be the most liquid current assets views, in particular the money supply, short-term financial loans or receivables that are not yet overdue, but the term of repayment already arrived.The debt, the payment period has expired, as well as other stocks with good intentions, can not be attributed to the highly liquid assets.Cash ratio shows how much the company can be solvent in the short term.The formula for calculating this indicator of absolute liquidity expressed by the sum of cash and marketable securities promptly divided by current liabilities.
From the standpoint of accounting cash ratio shows the amount of debt in the context of the current period, which will be possible to pay off at the time of the balance sheet.In calculating the ratio based on the received data for 2 and 4 sections of the balance sheet.
