Working Capital Ratio Formulas
Lambda
(Cash + Line of Credit + Daily Average Cash Flows)/Standard Deviation Daily Cash Flows
Quick Ratio
(Current Assets - Inventory)/Current Liabilities
Upper Control Limit (Miller-Orr)
3Z + Lower Control Limit
Average Cash Balance
4/3Z + Lower Control Limit
Days Payable Outstanding
AP/(COGS/365)
Days Sales Outstanding
AR/(Sales/365)
Net Liquidity Balance
Cash - Current Financial Liabilities (Long-term Debt)
Days Cash Held
Cash/(COGS/365)
Cash Ratio
Cash/Total Assets
Net Working Capital
Current Assets - Current Liabilities
Current Ratio
Current Assets/Current Liabilities
Operating Cycle
DIH+DSO
Cash Conversion Period
DIH+DSO-DPO
Total Cost (Baumol Model)
Fixed Cost(Total Cash Needed/Z) + Interest*(Z/2)
Days Inventory on Hand
Inventory/(COGS/365)
Cash Conversion Efficiency
Operating Cash Flows (Net Income + Depreciations + Change in Op. Working Capital)/Revenues
Net Operating Working Capital
Operating Current Assets - Operating Current Liabilities
Baumol Model (ECQ)
Z = sqrt[(2 x Fixed Cost x Total Cash Needed)/Interest]
Return Point (Miller-Orr)
Z+Lower Control Limit
Miller-Orr Model
Z= cuberoot[(3 x Fixed Cost x Variance)/(4*Interest)]
