Naturally there are many other things to consider, like the nature of the assets and liabilities, whether the company is currently making profits or losses, and the ratio of its liabilities to its equity.
Leverage is the ratio of capital to liabilities (or to assets perhaps) but it is not, never has been and never will be any ratio of assets to umm, assets, as is being claimed here.
The ratio of short term liabilities to short term assets has never been lower.
Problems may be worse for smaller companies and the subsidiaries of foreign firms, where pension funds usually have a lower ratio of assets to liabilities, says Stephen Yeo of Watson Wyatt.
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Liquidity for major non-financial corporations has never been better as measured by the high ratio of liquid assets to current liabilities.
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Lehman realized a benefit by using the cash received to pay down other liabilities for a temporary improvement in the leverage ratio.
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The June funded ratio, which measures assets to liabilities. is only 74% for CalPERS even using a high-rate of return assumption for its investments.
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This is why a high current ratio (current assets divided by current liabilities) raises my level of skepticism when I look at a company.
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Mr Osborne will also say the sale's valuation of Northern Rock's "price-to-book value ratio" - that is, its assets minus its liabilities - is higher than peers Barclays, Lloyds TSB or the Royal Bank of Scotland.
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Its current ratio, a measure of liquidity, is low, with current liabilities often bigger than current assets.
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And the quick ratio, which measures cash and accounts receivable relative to total current liabilities, has been trending lower over the years, dipping below 1 in the last 12 months.
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