Chicago, IL – May 15, 2012 - Stocks in this week's article include Hexcel Corp. (NYSE: HXL), MDC Holdings, Inc. (NYSE: MDC), Mohawk Industries, Inc. (NYSE: MHK), Standard Pacific Corp. (NYSE: SPF) and TransDigm Group, Inc. (NYSE: TDG). Kevin Matras explains how to use the Current Ratio as a financial health barometer.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
This week, I'm focusing on another ratio to help gauge a company's financial health: the Current Ratio.
It's calculated by dividing current assets by current liabilities.
The higher the ratio, the more liquid assets a company has to meet its short term obligations.
A ratio of 2 or more (meaning a company has at least twice as many short-term assets than short-term liabilities) is generally considered good.
Presently, the median current ratio for the stocks in the S&P 500 is 1.65.
In this week's screen, we'll use the Current Ratio as the main focus and add other logical items to produce a stock list of sound companies with solid prospects for the future.
For the rest of this Screen of the Week article, please visit Zacks.com at: http://www.zacks.com/commentary/21244/
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