Forex currency trading – One important factor is the company's net working capital, which is arrived at by subtracting current liabilities from current assets.


Working capital is a gauge of the financial leeway the company enjoys, a measure of the resources it can deploy to meet obligations, seize opportunities, and overcome crises. How much net working capital is enough? The rule of thumb says that for minimum safety it should equal current liabilities. Standard Oil of California far exceeds the margin. Subtracting its current liabilities of some $259 million from current assets of nearly $686 million leaves net working capital of more than $426 million. These huge dollar totals are impressive, but for many analysts a more significant measure of working capital is the ratio between current assets and current liabilities”the so-called current ratio.

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