Crystal Reports for Eclipse Designer Guide

FRQuickRatio (CurrentAssets, Inventories, CurrentLiabilities)

Description
FRQuickRatio returns the ratio between CurrentAssets (less Inventories) and CurrentLiabilities.
Format
FRQuickRatio(CurrentAssets, Inventories, CurrentLiabilities)
Arguments
  • CurrentAssets is a Number or formula. In general, CurrentAssets consists of cash, accounts receivable, inventories, prepaid expenses, and short term marketable investments in a company's balance sheet.
  • Inventories is a Number or formula. In general, Inventories consists of raw materials, work in progress, and finished goods in a company's balance sheet.
  • CurrentLiabilities is a Number or formula. In general, CurrentLiabilities consists of bank advances, accounts payable, dividends/income taxes payable, and a portion of long term loans due within one year in a company's balance sheet.
  • Action
    FRQuickRatio returns the ratio between CurrentAssets (less Inventories) and CurrentLiabilities (for example, QuickRatio = (CurrentAssets - Inventories) / CurrentLiabilities).
    Typical uses
    Since it takes time to convert raw materials to finished goods, and even finished goods are not really a liquid asset, this ratio removes inventories from current assets in calculating the liquidity of the company. It is a measure of how well current liabilities are covered by cash and ready cash equivalent. The higher the ratio, the higher the liquidity.
    Examples
    FRQuickRatio(7.2, 2.2, 2)
    Returns 2.5.
    FRQuickRatio(3, 1.5, 3)
    Returns 0.5.
    None of the arguments can be negative; you may have to check for negative values before passing the arguments.
    Comments
    FRQuickRatio is one of the many financial analysis tools used in interpreting the financial position of a company. As in the case of all ratios, it has to be used with caution. It can just be used as a clue and not solid proof for forming a judgment on the financial status of a company.
    Neither one of the ratios can be used alone for doing financial analysis and there are no fixed rules on the results of the ratios. Apart from differences between type of industries, result varies among different companies within the same industry and within different account periods. The results should only be used for relative comparison and trend analysis, rather than treating them as something absolute.



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