For Immediate Release
Chicago, IL – February 25, 2020 – Stocks in this week’s article are International Money Express, Inc. IMXI, Tandem Diabetes Care, Inc. TNDM, Kirkland Lake Gold Ltd. KL and USANA Health Sciences USNA.
4 Best-Ranked Liquid Stocks for Alluring Returns
Identifying stocks that offer healthy returns may sometimes become difficult for investors. In that case, one may take into account liquidity levels as it is considered to be a good indicator of a company’s financial health. Liquidity is a measure of a company’s capability to meet its short-term debt obligations.
However, high liquidity may also signify a company’s inefficiency to utilize its assets effectively. Thus, impressive liquidity positions and favorable efficiency levels indicate solid financial health.
Measures to Identify Liquid Stocks
Current Ratio: It measures current assets relative to current liabilities. This ratio is used for measuring a company’s potential to meet both short- and long-term debt obligations. Thus, a current ratio — also known as working capital ratio — below 1 indicates that the company has more liabilities than assets. However, a high current ratio does not always indicate that the company is in good financial shape. It may also mean that the company has failed to utilize its assets significantly. Hence, a range of 1 to 3 is considered ideal.
Quick Ratio: Unlike current ratio, quick ratio — also called “acid-test ratio" or "quick assets ratio" — indicates a company’s ability to pay short-term obligations. It considers inventory excluding current assets relative to current liabilities. Like the current ratio, a quick ratio of greater than 1 is desirable.
Cash Ratio: This is the most conservative ratio among the three, as it takes into account only cash and cash equivalents, and invested funds relative to current liabilities. It measures a company’s ability to meet its current debt obligations using the most liquid of assets. Though a cash ratio of more than 1 may point to sound financials, a higher number may indicate inefficiency in cash utilization.
So, a ratio greater than 1 is desirable at all times but may not always appropriately represent a company’s financial condition.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/781106/4-bestranked-liquid-stocks-for-alluring-returns
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USANA Health Sciences, Inc. (USNA) : Free Stock Analysis Report
Tandem Diabetes Care, Inc. (TNDM) : Free Stock Analysis Report
Kirkland Lake Gold Ltd. (KL) : Free Stock Analysis Report
INTERNATIONAL MONEY EXPRESS, INC. (IMXI) : Free Stock Analysis Report
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