How to assess a company for short term liquidity?

Hi friends...

I am working in Fixed income Dept. I look after the the commercial paper issuance for Corporates. Corporates issues commercial paper to meet their working capital requirement. Its issued normally for 1month to 12 month tenor..

I would like to know how can i quickly analyse companys short term Liquidity condition or how can i judge that company will be able to repay its short term debt? (I have to work on 50-60 companies)

Waiting for your reply...

Thanks in advance !!!!

Replies (1)

Ratios might help you out in that:-
1) Working Capital i.e. Current Assets-Current Liabilities
2) Current Ratio i.e. Current Assets/Current Liabilities
3) Quick or Acid-Test or Liquid Ratio i.e. Liquid Assets/Current Liabilities (Where Liquid Assets = Current Assets-Inventory-Prepaid Assets)

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