Computations
Balance Sheet
This ratio is used to measure a dealership’s ability to meet its short-term financial obligations without having to rely on inventory or prepaid items.
Example:
|
$6,500,000
-$5,800,000
-$45,000 |
|
|
$655,000 |
|
|
/ |
|
|
Total Current Liabilities |
$5,500,000 |
|
Ratio of Current Assets, Less Inventories and Prepaid Items to Current Liabilities |
0.12 to 1 |