The absolute liquidity of the enterprise is counted on the basis of data from the balance sheet and shows ability of the company to early repayment of accounts payable.
It is required to you
- - balance sheet of the enterprise.
Instruction
1. Absolute liquidity index - financial indicator, mathematically equal to the relation of volume of cash in cash desk or other assets equated to them (money on settlement accounts in banks and short-term monetary investments) to the volume of the current liabilities. The current liabilities (or short-term obligations) are short-term liabilities minus income of future period and the predicted expenses. It is possible to carry loans which can be repaid within the next year, unpaid requirements (for example, to suppliers or in the budget) and other obligations of the company to the current liabilities.
2. It is an important indicator of financial stability of the company or firm as money and current assets similar to them has high liquidity. The formula for calculation of coefficient looks so: K_absl = (short-term monetary investments are DS + KV) / TP where DS are money, KV, TP are the current liabilities.
3. In terms of arrangement of basic data in the balance sheet (Form 1) of the company the formula looks as follows: K_absl = (Stroki250 + 260) / (Stroki690 - 650 - 640).
4. It is considered that the value of an indicator of absolute liquidity is in norm limits if it exceeds 0.2, i.e. potentially the company can repay every day 20% of urgent obligations at the expense of highly liquid assets. Respectively, the this coefficient is higher, the absolute liquidity of the enterprise is higher. But on the other hand, if the indicator is too big, it can mean that the capital is structured irrationally and very big percent of idle assets (means on settlement accounts or in cash).