Companies that have historically had low debt ratios and sufficient cash flow to pay bills and repay debt and outstanding liabilities, relative to the market and/or their sector. This factor comprises the following sub-factors:
Quick Ratio
- The Quick Ratio, also known as the Acid Test Ratio, is defined as Total Current Assets minus Total Inventory for the most recent interim period divided by the Total Current Liabilities for the same period.
Please Note: This item is Not Available (NA) for Banks, Insurance companies and other companies that do not distinguish between current and long term assets and liabilities.
Long-Term Debt/Equity
- This ratio is the Total Long Term Debt for the most recent interim period divided by Total Shareholder Equity for the same period. In general a high Debt/Equity ratio suggests higher riskiness.
Total Debt/Total Assets
- This ratio is the Total Long Term Debt for the most recent interim period divided by Total Shareholder Equity for the same period. In general a high Debt/Equity ratio suggests higher risk.