Chicago, IL – November 2, 2010 - Stocks in this week's article include Buckeye Technologies Inc. BKI, Boise Inc. BZ, CNinsure Inc. CISG, iGATE Corp. IGTE and STR Holdings, Inc. STRI. Kevin Matras shows 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 better, meaning the company has more liquid assets 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 average current ratio for stocks in the S&P 500 is 1.82.
BTW – the Medical sector has the best current ratio with a median of 2.68 while Finance still has the worst at 0.96.
Screening for this is quite easy to do...
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BUCKEYE TECH (BKI): Free Stock Analysis Report
BOISE INC (BZ): Free Stock Analysis Report
CNINSURE IN-ADR (CISG): Free Stock Analysis Report
IGATE CORP (IGTE): Free Stock Analysis Report
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