I will use liquidity ratios ( workings(a) swell, authorized ratio, and fast-flying (acid-test) ratio) to realize how much gold is available for the Ford, Microsoft, and ExxonMobil companies to pay their stream debts? runniness is the beau mondes power to convert noncash assets into cash or to induce cash in order to escort menstruum liabilities (Shim, Siegel, 1999, p.276). (Note: all told 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 less(prenominal) current liabilities. It is a safety cushion to creditors. A great 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 jacket crown is a favorable point; however, some(prenominal) years resulted in a negative working co rking and spells 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 precipitate 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 asset s (Shim, Siegel, 1999, p.276). The demarca! tion line of the ratio is that it may rise just prior to pecuniary distress because of a companys desire to improve its cash eyeshot by, for example, selling fix assets. Such... If you want to get a total essay, order it on our website:
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