Source: https://guthlabs.ai/docs/instruments/working-capital-liquidity-ratios/

instrument / verified-clean

# Working Capital & Liquidity Ratios

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

Status: **VERIFIED_CLEAN**Lifecycle: **verified-clean**

## Inspectable records

[01**Overview**Purpose and lifecycle](<https://guthlabs.ai/docs/instruments/working-capital-liquidity-ratios/>)[02**Mechanism**Method and assumptions](<https://guthlabs.ai/docs/instruments/working-capital-liquidity-ratios/mechanism/>)[03**Implementation**Binding and validation](<https://guthlabs.ai/docs/instruments/working-capital-liquidity-ratios/implementation/>)[04**Qualification**Evidence and errata](<https://guthlabs.ai/docs/instruments/working-capital-liquidity-ratios/qualification/>)

## 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`