Page 23 - Finance Sustainability
P. 23
Key
Ratios
Ratio Measures Calculation Suggested Standard
Current Ratio Financial health and Current assets / Current 1.0-2.0
ability to pay short-term Liabilities
obligations with available
resources
Operating Reserves Are there sufficient Operating reserves / 25%
resources to support the annual (yearly) expenses
agency and maintain its
current operations
(assuming no other
revenues are generated
Quick Ratio How well the agency can Current assets (excluding 1.0
meet its short-term inventory and prepaid
obligations (used a lot by expenses / current
banks) liabilities
