Assuming US GAAP. To gain insight on what portion of the company’s assets is liquid, an analyst would most likely use: a. cash ratio b. current ratio c. comparative balance sheets d. common-sized balance sheets.
I bet it’s not that easy, to have been made it to the forum… Still I’ll go with A? A) Most conservative liquidity ratio CR = C + MS / CL
d? Portion of a companies assets that are liquid sounds like you want to compute a ratio of liquid assets / total assets
Answer was D). It was from a CFA sample exam (V1). I thought it was B…
D. Common Sized Balance Sheet would specify current assets as a percentage of total assets.
I believe more than what apcarlso has said above, because you are comparing more than 1 company - and all have been reduced to Common size – you just have to compare a string of numbers to identify which one is the most liquid
yeah, definitely D