Taking a Look at Emera

The Company had $1.55 of current assets to repay each $1 in liabilities in 2014, dropping to $0.94 per $1 in 2015 respectively. The decrease in current ratio occurred due to the decrease in current assets and increase in current liabilities from 2014 to 2015. It is important to recognize that in 2015, SCC did not have enough current assets to pay for its current liabilities. The note of financial statements attributed this to the increase in trades payable and accrued expenses from the expansion plan of SCC, leading to

To gauge this ability, the current ratio considers the current total assets of a company (both liquid and illiquid) relative to that company's current total liabilities. The current asset of Bombardier is $12,242 and the current liability is 10,556. The current ratio is 1.16. A working capital ratio of less than 1.0 is a strong indicator that there will be liquidity problems in the future, while a ratio in the vicinity of 2.0 is considered to represent good short-term liquidity. Therefore, Bombardier may have the liquidity in the future.

The following financial data illustrates the firm’s short-term ability to pay maturing obligations and to meet unexpected needs for cash:

Working capital is the measure of a company’s efficiency and operating liquidity. The working capital is usually calculated by

A business will run smoothly if the working capital is used effectively, hence the description “Working” capital. Managing this is a delicate balance and needs to be monitored regularly to make sure both debtors and creditors are on track. One of the most effective ways to manage this figure is to ensure debtors to the company pay their debts on time (or early if

Working capital ratio, the working capital ratio, also called the current ratio. Is a liquidity ratio that measures a firm 's ability to pay off its current liabilities. For example, financial obligation, with their current assets. Working capital is calculated

Liquidity ratios measure a company’s capability in achieving their short-term financial debts, for example current assets ratio and quick ratio. (Campbell R.Harvey, 2004b)

The current ratio is considered to be the most simplified liquidity test. It essentially signifies a company 's capacity to satisfy its short-term liabilities utilizing its short-term assets. A current ratio which is larger than or equal to one shows that current assets should have the ability to satisfy its short-term obligations. A current ratio that is less than one may entail

Liquidity ratios, like the current ratio, provide information about a firm's ability to meet its short time financial obligations. Short-term creditors seek a high current ratio from prospective clients since it reduces their risk. For investors in a company, such as shareholders, a lower ratio is sought, so that more of a firm's assets are working to grow the business. When computing financial relationships, a good indication of the company's financial strengths and weaknesses becomes clear. Examining these ratios over time provides

Any value less than 1 indicates negative working capital. Any value greater than 2 suggests that the organization is reluctant in investing excess assets. Organizations that obtain values between 1.2 and 2.0 are considered to be having sufficient working capital. This is the healthy margin as far as working capital is held in

Liquidity ratios determine the company’s liquid assets to pay off short-term debt. The current ratio shows for every dollar of current

The liquidity of a company is the ability to meet its loan obligations as it relates to its current assets and its current liabilities (Marshall, 2002). Appendix B shows that we have analyzed three important liquidity ratios: 1) Current Ration, 2) Acid Test, and 3) Working Capital. Of these three, the best indicators of liquidity, when trying to show trends, are the Acid test and the Current Ratio. A current ratio of 2 and an acid test of 1.0 are considered "adequate liquidity" (Marshall, 2002). Sample Company's Acid Test numbers for 2000 and 2001 were .84 and .79, and its Current Ratio numbers for 2000 and 2001 were 1.45 and 1.54. Each sets of these ratio figures indicate that Sample Company could possibility have some difficulties in meeting its financial obligations, so these numbers will be important to watch closely in the future.

alone has the ability to increase profits. The company’s debt is very low as indicated by the debt ratio of

2. Liquidity ratios are used to measure the ability of the company to meet its obligations for the coming year. The main liquidity ratio is the current ratio, which is the current assets over current liabilities. The quick ratio excludes inventories from the current assets, and the cash ratio is simply the amount of cash divided by the current liabilities. These ratios are often benchmarked against industry norms and against past performance.

Financial Ratio Analysis is important for a company to use because it helps the business learn more about their company’s current financial health. There are different types of ratios that a company can perform to provide them the information from their financial statements. One of the common ratios used is to see the company’s liquidity. A liquidity ratio would help measure the company’s ability to cover their expenses. These ratios are both based off information provided from the balance sheet. The two most commonly used liquidity ratios companies use is the current ratio and quick ratio.