Long
term liabilities, such as capital (i.e., directors loans) are usually excluded from the current ratio.
If your supplier account owing balance includes such long term liabilities, you should calculate the ratio
manually, as described above.Quick System Overview
To access the Quick System Overview screen select File|Statistics from the main menu.
This screen provides a company-wide summary of money owing to your suppliers, money owed from your customers, the value of your stock according to your inventory system, and the cash in your bank accounts.
The total represents (for many companies) a quick snapshot overview of your key accounts and their values according to the information entered into CAPITAL.
Current Ratio
This ratio is a guide used to compare your customers, bank account and inventory values (assets) relative to your suppliers (liabilities). It is sometimes referred to as the Working Capital Ratio. Its purpose is to compare the short term strength of a business. A ratio of 2:1 is generally considered satisfactory (however this will vary depending on business type).
To calculate the ratio manually, add all current assets (such as customer money owing, bank balance and stock) and divide this by total liabilities (supplier money owing.) Of course, if your bank balance is negative, this should be moved to the liabilities part of the equation.
Long
term liabilities, such as capital (i.e., directors loans) are usually excluded from the current ratio.
If your supplier account owing balance includes such long term liabilities, you should calculate the ratio
manually, as described above.
Acid Test Ratio
The acid test ratio is similar to the current ratio except it excludes inventory from the value of your assets as stocks are usually not very "liquid". The acid test is useful if you need to ask yourself: if I had to pay all my debts tomorrow, to what extent would this be possible?
Important Notes
The values of these accounts may be incorrect for a variety of reasons. You should perform a Customer Accounts Recalculation, Supplier Accounts Recalculation, Stock Recalculation and/or individual Cash Management Recalculation in order to update these values if they are incorrect. Recalculation utilities can be found under the Diagnose menu inside the INSTALLATION Workshop program.
Possible reasons why these values may be incorrect include:
Lost data due to system crashes or other computer problems and interruptions.
Computer drop-outs or "hang-ups".
Importing or exporting data from an external source or when using one of CAPITAL's supplied import/export utilities. (But not E-Gate related services.)
Cash books can be excluded from this overview screen -- useful when using cash books for budget purposes. Be sure to check the In Overview setting of each cash book. For more information see the topic: Cash Management Account Details.
The information entered into CAPITAL may be incomplete or incorrect.
Accounts set to Internal type are excluded from the overview.
If users are restricted from printing standard financial reports, they will also be restricted from viewing this screen.
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