00:01
In your question, you've asked me to discuss three financial ratios that help assess the strength of a specific company.
00:08
For this example, you've said pick any fortune 500 company, and we're going to talk about nike in relation to a few important financial ratios, specifically three that you're going to learn about.
00:21
The first is called the current ratio.
00:25
The formula to find the current ratio is current assets divided by current liability.
00:32
So for nike, current assets, examples are inventory, supplies, et cetera.
00:39
Current liabilities would be the mortgage amount that is due in this next upcoming month.
00:44
The current ratio helps us assess liquidity.
00:48
How quickly can we convert things to cash if needed? and how quickly do we need cash to pay off readily soon payables, things we owe? the second ratio that you're going to learn about is the debt ratio.
01:01
And the formula for the debt ratio is the total debt divided by the total assets...