Archive for November, 2007
Short Term Investments Examples

Question: Is the account “Other Current Assets” on a balance sheet included in a Quick Ratio (Acid-Test Ratio)?
For example, on a balance sheet:
Current Assets (in millions) -
Cash and Cash equivalents: 445
Short-Term Investments: 12
Receivables, net: 1259
Merchandise Inventories: 11731
Other Current Assets: 1227
And say Total Current Liabilities is 12706
So for a quick ratio, would I use
(445 + 12 + 1259)/12706
or do I need to include the “Other Current Assets” account for
(445 + 12 + 1259 + 1227)/12706 ?
Answer: yes
Short Term Spread Betting: Winning Strategies for Active Traders