Change banks solely for a better interest rate, unless your bank is not competitive. The Current Ratio measures how much money is available in current assets to pay current liabilities. That is assets due within one year and liabilities due in one year. This is a more stringent test for solvency and is a good indicator of liquidity, since inventory, and other current assets not readily available to pay current liabilities, are excluded from this ratio. Assuming good accounts receivable collection, a quick ratio of around 1.0 is usually adequate.
Safety is defined as the ability of the firm to withstand adversity.
It reflects the riskiness of the firm. This ratio is also referred to as the Debt to Equity Ratio. The Debt to Equity ratio is 0.9 for the safest firms, 2.0 for the average firms, and 3.2 for the riskiest firms. The better firms have only 90 cents of total debt for every dollar. Dell Van Orden has been the controller at Cain's Home Furnishings in Twin Falls Idaho since 1982, and CEO since 1993.