Use the Quick
Ratio
www.CandlestickForums.com
Investors use the quick ratio, also known as
the acid test, to determine if a company
has the ability, in the near term, t...
Creditors also use the quick ratio in deciding
whether or not to extend loans to
companies.

www.CandlestickForums.com
Before We Continue…

Click the links below to get your
FREE training materials.
Free Weekly Investing Webinars

Don’t miss...
Both investors and traders use the quick
ratio in evaluating stocks and deciding if a
stock price is likely to rise or fal...
The quick ratio differs from the price to
earnings ratio in that it does not measure
current cash flow but rather cash, or...
In this sense investors use the quick ratio as
a measure of a stock’s margin of safety.

www.CandlestickForums.com
A stock with a high quick ratio will be seen
as a secure investment whereas a stock
with a low quick ratio will be seen as...
The day trader may use the quick ratio in
picking stocks that might become volatile
due to debt problems.

www.Candlestick...
If a company is currently unable to retire its
debt, it may subject to stock price volatility.

www.CandlestickForums.com
Following the stock with Candlestick
analysis will help the trader anticipate
price movement in response to this
situation...
Although the fundamentals of a stock are
quickly discounted by the market, knowing
fundamentals gives the investor or trad...
In long term investing, intrinsic stock value is
thought by many to be the gold standard.

www.CandlestickForums.com
However, a company with great products
and services still needs to manage its
short term debt in order to survive.

www.Ca...
Sadly, too many promising companies go
out of business or are taken over because
of short term debt issues.

www.Candlesti...
The savvy trader will spot these stocks and
use technical analysis tools such as
Candlestick pattern formations in order t...
To use the quick ratio effectively one needs
to understand that what constitutes an
acceptable quick ratio varies among
ma...
In other words the investor or trader will
compare a stock’s quick ratio with other
stocks selling comparable products or
...
A quick ratio of 1 or better tells us that a
company has cash and quickly convertible
assets sufficient to retire immediat...
It does not tell us about the company’s
credit worthiness.

www.CandlestickForums.com
For example, a company with substantial
debt free property and plant facilities as
well as a strong cash flow will typical...
We would typically not expect to see a great
deal of market volatility in such a stock
using Candlestick charting techniqu...
In trading stocks or in options trading the
quick ratio is a useful guide to short term
credit worthiness.

www.Candlestic...
Spotting stocks with questionable quick
ratios and analyzing with Candlestick
patterns can lead to profitable stock
tradin...
For the long term investor finding stocks
with high quick ratios can be a first step to
finding valuable additions to a st...
Use the Quick Ratio
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Use the Quick Ratio

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Use the Quick Ratio

Investors and traders use the quick ratio, also known as the acid test, to determine if a company has the ability, in the near term, to pay back current debt. Creditors also use the quick ratio in deciding whether or not to extend loans to companies. Both investors and traders use the quick ratio in evaluating stocks and deciding if a stock price is likely to rise or fall. The quick ratio differs from the price to earnings ratio in that it does not measure current cash flow but rather cash, or cash equivalents, in hand. In this sense investors use the quick ratio as a measure of a stock’s margin of safety. A stock with a high quick ratio will be seen as a secure investment whereas a stock with a low quick ratio will be seen as risky. The day trader may use the quick ratio in picking stocks that might become volatile due to debt problems. If a company is currently unable to retire its debt, it may subject to stock price volatility. Following the stock with Candlestick analysis will help the trader anticipate price movement in response to this situation.

The Quick Ratio as a Fundamental of Stock Analysis

Investors use the quick ratio as part of fundamental analysis of stocks. Although the fundamentals of a stock are quickly discounted by the market, knowing fundamentals gives the investor or trader as clear idea of the likely limits of a stock’s price. In long term investing, intrinsic stock value is thought by many to be the gold standard. However, a company with great products and services still needs to manage its short term debt in order to survive. Sadly, too many promising companies go out of business or are taken over because of short term debt issues. The savvy trader will spot these stocks and use technical analysis tools such as Candlestick pattern formations in order to profitably anticipate changes in price.

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Use the Quick Ratio

  1. 1. Use the Quick Ratio www.CandlestickForums.com
  2. 2. Investors use the quick ratio, also known as the acid test, to determine if a company has the ability, in the near term, to pay back current debt. www.CandlestickForums.com
  3. 3. Creditors also use the quick ratio in deciding whether or not to extend loans to companies. www.CandlestickForums.com
  4. 4. Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! http://www.profitableinvestingtips.com/free-webinar Forex Conspiracy Report Read every word of this report! http://www.forexconspiracyreport.com
  5. 5. Both investors and traders use the quick ratio in evaluating stocks and deciding if a stock price is likely to rise or fall. www.CandlestickForums.com
  6. 6. The quick ratio differs from the price to earnings ratio in that it does not measure current cash flow but rather cash, or cash equivalents, in hand. www.CandlestickForums.com
  7. 7. In this sense investors use the quick ratio as a measure of a stock’s margin of safety. www.CandlestickForums.com
  8. 8. A stock with a high quick ratio will be seen as a secure investment whereas a stock with a low quick ratio will be seen as risky. www.CandlestickForums.com
  9. 9. The day trader may use the quick ratio in picking stocks that might become volatile due to debt problems. www.CandlestickForums.com
  10. 10. If a company is currently unable to retire its debt, it may subject to stock price volatility. www.CandlestickForums.com
  11. 11. Following the stock with Candlestick analysis will help the trader anticipate price movement in response to this situation. www.CandlestickForums.com
  12. 12. Investors use the quick ratio as part of fundamental analysis of stocks. www.CandlestickForums.com
  13. 13. Although the fundamentals of a stock are quickly discounted by the market, knowing fundamentals gives the investor or trader as clear idea of the likely limits of a stockfs price. www.CandlestickForums.com
  14. 14. In long term investing, intrinsic stock value is thought by many to be the gold standard. www.CandlestickForums.com
  15. 15. However, a company with great products and services still needs to manage its short term debt in order to survive. www.CandlestickForums.com
  16. 16. Sadly, too many promising companies go out of business or are taken over because of short term debt issues. www.CandlestickForums.com
  17. 17. The savvy trader will spot these stocks and use technical analysis tools such as Candlestick pattern formations in order to profitably anticipate changes in price. www.CandlestickForums.com
  18. 18. To use the quick ratio effectively one needs to understand that what constitutes an acceptable quick ratio varies among market sectors. www.CandlestickForums.com
  19. 19. In other words the investor or trader will compare a stock’s quick ratio with other stocks selling comparable products or services and not with the market in general. www.CandlestickForums.com
  20. 20. A quick ratio of 1 or better tells us that a company has cash and quickly convertible assets sufficient to retire immediate debt. www.CandlestickForums.com
  21. 21. It does not tell us about the company’s credit worthiness. www.CandlestickForums.com
  22. 22. For example, a company with substantial debt free property and plant facilities as well as a strong cash flow will typically be able to borrow money to cover short term needs even it does not have the cash on hand. www.CandlestickForums.com
  23. 23. We would typically not expect to see a great deal of market volatility in such a stock using Candlestick charting techniques. www.CandlestickForums.com
  24. 24. In trading stocks or in options trading the quick ratio is a useful guide to short term credit worthiness. www.CandlestickForums.com
  25. 25. Spotting stocks with questionable quick ratios and analyzing with Candlestick patterns can lead to profitable stock trading. www.CandlestickForums.com
  26. 26. For the long term investor finding stocks with high quick ratios can be a first step to finding valuable additions to a stock portfolio. www.CandlestickForums.com

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