Working Capital & Liquidity Ratios mechanism

Model scope

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.

• 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.

Units and conventions

• 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.

Inspectable vector

One of 4 source-bound review vectors:

{
  "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."
}

Failure boundary

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.

Other records

Sources and evidence

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

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