[Verse 1]
Sarah's bakery needs supplies by Friday morning
Bills are stacking up, creditors are calling
She counts her assets, checks what she can grab
Current ratio tells her if she's in the red or black
[Pre-Chorus]
Divide what you own by what you owe
Three ratios every analyst should know
[Chorus]
Current ratio - all assets that convert
Quick ratio - subtract inventory first
Cash ratio - only money in the vault
Liquidity tells you who will pay and who will default
[Verse 2]
Current assets over current debts
One point five or higher is a safer bet
But inventory might be sitting on the shelf
Quick ratio shows your true financial health
[Pre-Chorus]
Take away the stock that's hard to sell
Acid test reveals what numbers really tell
[Chorus]
Current ratio - all assets that convert
Quick ratio - subtract inventory first
Cash ratio - only money in the vault
Liquidity tells you who will pay and who will default
[Bridge]
Cash plus equivalents divided by what's due
Most conservative measure, strictest point of view
Zero point two means twenty cents per dollar owed
Some companies survive on much less, some explode
[Verse 3]
Seasonal business might show lower scores
Grocery stores turn inventory more than furniture stores
Context matters when you're reading every line
Industry benchmarks help you draw the dotted line
[Final Chorus]
Current ratio - all assets that convert
Quick ratio - subtract inventory first
Cash ratio - only money in the vault
Liquidity ratios prevent financial assault
[Outro]
When obligations knock upon your door
Make sure liquid assets give you something more