Coefficient of current liquidity: formulas and definitions

The term in question is an economic value, which, in turn, characterizes the ability of funds to be most quickly realized at the highest price, which is close to market value. In other words, we can say that the concept of "liquid" means "convertible into money."

It should also be noted that the faster the above process occurs, the higher the realizability of assets. With regard to goods, the value of the value in question will correspond to its nominal value. Thus, the amount of added value and all sorts of additional discounts will not be taken into account.

Classification

At present, specialists evaluate the financial results of the enterprise's economic activities with the help of special indicators. One of them is the current liquidity ratio by balance. Consider this criterion in more detail. To begin with, it should be noted that the calculation of this value is carried out in conjunction with the calculation of the balance sheet. The ability of the organization to repay existing liabilities for the period under review as a result of the use of current assets for the same period of time is most accurately illustrated by the current liquidity ratio.

Formulas for calculation can have a variety of forms, but in most cases the following simplified version of this expression is used: the amount of circulating assets is divided into liabilities for the period under consideration. However, of course, it is also necessary to remember the degree of liquidity of the component assets.

Thus, the higher the value of the current liquidity ratio, the more confident you can talk about the organization's consistency. Currently, accounting specialists have accepted that the value of the indicator in question, greater than or equal to 1.5, is sufficiently reliable, which, in turn, allows maintaining the value of the company's shares at a constant level.

Coefficient of current liquidity (formula)

In addition to the above simplified type of the sought expression, there are many different modifications that to some extent reveal the described action. For example, the formula Ктл = (ОА - ДЗд - ЗУ) / KO shows the influence of long-term accounts receivable (ДЗд) and liabilities of founders (ЗУ) regarding payments and contributions to the fund of authorized capital by the amount of current assets (OA).

At the same time, it is possible to express the current liquidity ratio (the formulas are apparently different) as follows: Rm = (A1 + A2 + A3) / (P1 + P2). This equation clearly shows the share of participation indicators with varying degrees of realizability (A1, A2, A3), as well as the maturity of obligations (P1, P2).

Application

The coefficient of current liquidity (the formulas mentioned above) may be of interest not only for the founders of the company or the management of the enterprise, but also for investors. Knowing the value of this indicator, people understand where it is expedient to invest their money.