Working Capital & Liquidity Ratios

Inspectable records

Ledger state

The current ledger marks this instrument verified clean within the source-bound verification corpus.

Area

Finance, Economics & Business (educational only — never individualized investment, tax, or legal advice)

Tranche

tranche-5

Evidence ID

t5-073

Ledger rows

1

No ledger note is attached.

Review findings

The formulas are mathematically correct under the stated assumptions, and the educational estimate label is appropriate. Review is required because the input units and quick-ratio asset-eligibility convention are not explicitly defined. Add validation for positive current liabilities, inventory inclusion within current assets, consistent currency/scale, and same-date balance-sheet inputs.

Formula and scope findings

• current_ratio=CA/CL is the standard current ratio when current assets and current liabilities are measured in the same currency and CL is nonzero.
• WC=CA-CL is the standard working-capital formula under the same-period balance-sheet assumption.
• quick_ratio=(CA-inventory)/CL is a valid simplified quick-ratio convention, but many standard definitions also exclude prepaid expenses and other non-quick current assets; the instrument must explicitly state this convention.

Unit assumptions

• Current assets, current liabilities, and inventory must use the same currency and scale, such as all USD or all USD thousands.
• The figures must be from the same balance-sheet date.
• Inventory is assumed to be included in current assets and not greater than current assets.
• Current liabilities must be nonzero for both ratios; working capital itself does not require division.
• The reported working-capital currency unit matches the input currency unit.

Boundary hardening

BREAK_CLAIMED · SELF_FLAGGED

A zero-current-liabilities input makes both ratios undefined. The instrument must reject CL=0 or return an explicit undefined result rather than dividing by zero or displaying a misleading finite value.

Errata and corrections

No applied erratum is attached to this unique-name record.

Inspectable example

4 review vectors are recorded. One source-bound sample is shown below.

{
  "inputs": {
    "current_assets": 125000,
    "current_liabilities": 50000,
    "inventory": 30000,
    "currency": "USD"
  },
  "expected_outputs": {
    "current_ratio": 2.5,
    "quick_ratio": 1.9,
    "working_capital": 75000,
    "working_capital_currency": "USD"
  },
  "working": "current ratio = 125000 / 50000 = 2.5; quick assets = 125000 - 30000 = 95000; quick ratio = 95000 / 50000 = 1.9; working capital = 125000 - 50000 = 75000 USD."
}

Related workflows

No source-defined multi-instrument workflow membership is recorded.

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json · VERIFIED_CLEAN
• evidence-tranche5/tranche5-results.json
• BOUNDARY_HAZARD_CATALOG.json