Melissa Bockhold Heather Coddington - Franklin College

how capable a company is to pay back their short-term liabilities by using their short-
term assets. The higher this ratio is, the more able a company is to pay off these
obligations. This ratio also gives us an idea of how efficient a company is at turning their
products into cash. From our numbers in 1999, the Current Ratio for Seagate was 4.12
when compared to its competitors Quantum HDD, Western Digital, Maxtor. Quantum
HDD was the next highest with 3.11. It is easy to see that Seagate leads this category
and is able to turn their assets into liquidity faster than the competition.
The next ratio we looked at was the Quick Ratio. Like the Current Ratio, this
financial tool also tells us about a company’s short-term liquidity. However, this ratio is
more conservative than the Current Ratio because it only takes into account the
company’s most liquid assets. Like the Current Ratio, the higher the result, the more
capable the company is to cover all of their debts quickly. Our analysis shows that, once
again, Seagate is the highest with a Quick Ratio of 3.48, while Quantum is second with
only 2.67.
The Cash Ratio is another liquidity ratio that can be used to evaluate a company’s
short term ability to pay off their current liabilities. This ratio is even more conservative
than the other two because the only asset it takes into consideration is cash. As expected
from the previous ratios, Seagate is once again the highest with 2.27, while Quantum is at
1.53. The other two competitors are below one, which means that they would not be able
to cover all of their current liabilities with just their cash.
NWC to Total Assets is another liquidity ratio that shows us how much short term
liquidity a company has in relation to its total assets. In our case, Seagate has a ratio of
25%. The company with the highest percentage is Quantum at 48%, and the lowest is
28