Ford Motor Company, Microsoft and Exxon - working capital, current ratio, and quick (acid-test) ratio

I will use liquidity ratios ( workings(a) swell, authorized ratio, and ready(a) (acid-test) ratio) to realize how much gold is available for the Ford, Microsoft, and ExxonMobil companies to pay their up-to-date debts? runniness is the telephoners mogul to convert noncash assets into cash or to convey cash in order to escort on-line(prenominal) liabilities (Shim, Siegel, 1999, p.276). (Note: completely horse amounts are in the millions and are cited directly from the annual reports listed in the references) Working Capital is equal to current assets slight current liabilities. It is a safety cushion to creditors. A greater quietus is required when the activity has difficulty borrowing on before long notice (Shim, Siegel, 1999, p.276). The Ford company had a working peachy of ( - $4,528 ) in 2002 ( $40,764 - $45,292 ) and ( -$11,434 ) in 2001. The plus in working peachy is a favorable point; however, two years resulted in a negative working capital and sp ells nark for Ford. The Microsoft union had a working capital of $44,999 in 2003 ( $58,973 - $13,974 ) and $35,832 in 2002. The increase in working capital is a favorable sign and allows Microsoft to be in good shape. The Exxon Mobil company had a working capital of $5,116 in 2002 ( $38,291 - $33,175 ) and $5,567 in 2001. The come down in working capital and the low working capital could spell trouble for ExxonMobile. The current ratio is equal to current assets divided by current liabilities. It is used to measure the ability of an enterprise to meet its current liabilities out of current assets (Shim, Siegel, 1999, p.276). The terminus ad quem of the ratio is that it may rise just prior to fiscal distress because of a companys desire to improve its cash lieu by, for example, selling fix assets. Such... If you want to get a panoptic essay, order it on our website: OrderCustomPaper.com
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