FIXED ASSETS (NET) / NET WORTH Definition

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FIXED ASSETS (NET) / NET WORTH measures liquidity by comparing "fixed" assets with "fixed" capital. A lower ratio indicates proportionately smaller investment and a better "cushion" for creditors in case of liquidation. This may be important if the fixed assets are not easily used in other businesses. The presence of substantial leased fixed assets (not shown on the balance sheet) may deceptively lower this ratio. Therefore smaller is better, i.e., greater than .75 (75%) should merit caution.

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CHECK DIGIT is a redundant digit added to a code to check accuracy of other characters in the code.

HORIZONTAL FINANCIAL ANALYSIS allows comparison of one companys ratios to the ratios of other companies as well as to average industrial ratios and internal industrial deviation of these ratios.

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