financial ratios

mba/ch36.org

@@ -5,7 +5,26 @@
 
 * Links
 - [[./../mba-main.org][<Back to Main MBA]]
-- [[https://www.udemy.com/course/an-entire-mba-in-1-courseaward-winning-business-school-prof/learn/lecture/4311526#overview][S06:L34 Income Statement, Balance Sheet, Financial Risk]]
-- [[https://www.udemy.com/course/an-entire-mba-in-1-courseaward-winning-business-school-prof/learn/lecture/4311576#overview][S06:L35 Cash Flow Statement]]
+- [[https://www.udemy.com/course/an-entire-mba-in-1-courseaward-winning-business-school-prof/learn/lecture/4282978#overview][S06:L36 Financial Ratios]]
 
 * Notes
+
+** Liquidity Ratios
+*** basics
+  - also called "Liquidity"
+  - measure our ability to pay short term debt
+  - get a loan
+
+*** Current Ratio
+- \( \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} \).
+
+- if it is positive, then the banks think you can pay your bills
+
+*** quick ratio
+- \( \text{Quick Ratio} = \frac{\text{Current Ratio} - \text{inventory}}{\text{Current Liabilities}}\)
+- used in case the inventory has to be discounted (ie the inventory just got recalled)
+
+** Leverage Ratios
+- Debt to total assets = debt / assets
+- Interest coverage = EBITDA / interest
+  - Earnings Before Interest Taxes Depreciation and Amoritization