The accounting definition of healthy re current as
Post# of 9144
Posted On: 04/25/2015 4:25:55 PM
The accounting definition of healthy re current assets is for current assets to exceed current liabilities
at this pps current ratios are often not healthy.
As I said before I've seen pennies w a current ratio of .0001 and non-existent quick ratios (ratio of current assets which can be liquidated within 90 days to current liabilities) and since all of their current assets can ordinarily be converted to cash within 90 days they have an outstanding quick ratio.
The current and quick ratios are used as a measure of the likelihood of bankruptcy and using such as of the time of those financials NNLX had 0% chance of bankruptcy.
CA are over 120k
CL only 79k- and 59k of that is a loan from Bret -so without the loan from Bret-which may turn out to be a long term liability and not CL at all, there would be only ca 20k CL- so would be CA ratio of 6, which is astounding
the ideal ratio is for CA to be at least twice CL but very few pennies -esp at this pps -achieve that
you cant apply 100 dollar /share blue chip standards to a few cent stock.
the balance sheet is much better than average for this pps and the income /pps ratio is also very healthy at this pps
1 nice thing about their cost conscious approach and the lack of long term debt is no huge rollover convertibles nor huge interest costs on the same.
So they are in control of much of their costs- e.g R and D and wages.
As to accumulated deficit that is not uncommon for a biotech and again u have to put that into context of long term debt -of which there isnt any that we know of from the financials.
Since u dont know anything about accounting u should know that almost everything on financials has to be interpreted in light of the whole-
which is why accounting utilizes so many ratios to judge how healthy financials are -very rarely are individual items considered in the stand alone framework u keep using to misinterpret.
at this pps current ratios are often not healthy.
As I said before I've seen pennies w a current ratio of .0001 and non-existent quick ratios (ratio of current assets which can be liquidated within 90 days to current liabilities) and since all of their current assets can ordinarily be converted to cash within 90 days they have an outstanding quick ratio.
The current and quick ratios are used as a measure of the likelihood of bankruptcy and using such as of the time of those financials NNLX had 0% chance of bankruptcy.
CA are over 120k
CL only 79k- and 59k of that is a loan from Bret -so without the loan from Bret-which may turn out to be a long term liability and not CL at all, there would be only ca 20k CL- so would be CA ratio of 6, which is astounding
the ideal ratio is for CA to be at least twice CL but very few pennies -esp at this pps -achieve that
you cant apply 100 dollar /share blue chip standards to a few cent stock.
the balance sheet is much better than average for this pps and the income /pps ratio is also very healthy at this pps
1 nice thing about their cost conscious approach and the lack of long term debt is no huge rollover convertibles nor huge interest costs on the same.
So they are in control of much of their costs- e.g R and D and wages.
As to accumulated deficit that is not uncommon for a biotech and again u have to put that into context of long term debt -of which there isnt any that we know of from the financials.
Since u dont know anything about accounting u should know that almost everything on financials has to be interpreted in light of the whole-
which is why accounting utilizes so many ratios to judge how healthy financials are -very rarely are individual items considered in the stand alone framework u keep using to misinterpret.
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