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· 11 min read
The quick ratio removes inventory because inventory is the current asset that may not convert. Two companies with an identical current ratio can be five times apart on the quick ratio — and both measures are still blind to the one thing that actually stops a company paying: timing.
· 11 min read
EBITDA adds back the two costs that differ most between companies, which is exactly what makes it comparable — and exactly why it flatters anyone who owns a lot of equipment. Here is the same profit walked all the way down, and the maintenance-capex floor the measure never shows.
· 12 min read
Margin is measured on the selling price, markup on the cost. They describe the same profit from opposite ends, they are never equal, and reading one as the other quietly removes a large slice of your gross profit.