Operating Cycle Inventory as Receivables
Operating Cycle Cash Inventory Receivables Intermediate Accounting 10 Current Liabilities And Contingencies
Liquidity Liquidity refers to how quickly a liability can be paid, or its nearness to cash
Liquidity Liquidity refers to how quickly a liability can be paid, or its nearness to cash. Intermediate Accounting 10 Current Liabilities And Contingencies
Ways ofReporting liquidity 1. Classify current liabilities and assets(mixture of operating-cycle and maturity-date approach) 2. Classify current liabilities and assets using the"pure operating-cycle approach 3. Classify current liabilities and assets under the maturity-date approach only 4. Adopt a different classification scheme, possibly using more classes 5. Leave the balance sheet unclassified but arranging items in order of liquidity
Ways of Reporting Liquidity 1. Classify current liabilities and assets (mixture of operating-cycle and maturity-date approach). 2. Classify current liabilities and assets using the “pure” operating-cycle approach. 3. Classify current liabilities and assets under the maturity-date approach only. 4. Adopt a different classification scheme, possibly using more classes. 5. Leave the balance sheet unclassified but arranging items in order of liquidity. Intermediate Accounting 10 Current Liabilities And Contingencies
Liquidity Ratios o Cash flows to total debt 2 Net income to total assets(return on total assets ratio 3 Total debt to total assets a Current assets to current liabilities (current ratio) s Cash to current liabilities
Liquidity Ratios Cash flows to total debt. Net income to total assets (return on total assets ratio). Total debt to total assets. Current assets to current liabilities (current ratio). Cash to current liabilities. Intermediate Accounting 10 Current Liabilities And Contingencies
Types of current liabilities Having contractual Amount Accounts payable Notes payable Currently maturing portion of long- term debt Dividends payable Advances and refundable deposits Accrued items Unearned items
Types of Current Liabilities Having Contractual Amount Accounts payable Notes payable Currently maturing portion of longterm debt Dividends payable Advances and refundable deposits Accrued items Unearned items Intermediate Accounting 10 Current Liabilities And Contingencies