Wii Presentation
Jeffrey Telford
Because my wife is in labor, I may not be able to make it tonight but
here are a few explanations of the ratios I put on the slides:
Current Ratio: Bad when less than 2. It doesn't necessarily mean
bankruptcy when the number is low. The ratio is mainly used to give an
idea of the company's ability to pay back its short-term liabilities
(debt and account payables) with its short-term assets (cash,
inventory, receivables). The higher the current ratio, the more
capable the company is of paying its obligations. Nintendo is in good
shape.
Working Capital: Should be between 30-90 days approximately. Positive
working capital means that the company is able to pay off its
short-term liabilities. Negative working capital means that a company
currently is unable to meet its short-term liabilities with its
current assets (cash, accounts receivable and inventory). Nintendo and
Microsoft are in good shape.
--
Jeff