Current ratio of Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp
The current ratio is an indication of a company's liquidity and measures the capability to meet a company's short-term obligations. It compares a firm's current assets to its current liabilities, and is expressed as current assets divided by current liabilities. The ratio is only useful when two companies are compared within industry because inter industry business operations differ substantially. To determine liquidity, the current ratio is not as helpful as the quick ratio, because it includes all those assets that may not be easily liquidated, like prepaid expenses and inventory.
Acceptable current ratios vary from industry to industry. In many cases an investor would consider a high current ratio to be better than a low current ratio, because a high current ratio indicates that the company is more likely to pay the investor back. Large current ratios are not always a good sign for investors. If the company's current ratio is too high it may indicate that the company is not efficiently using its current assets or its short-term financing facilities. If current liabilities exceed current assets the current ratio will be less than 1. A current ratio of less than 1 indicates that the company may have problems meeting its short-term obligations.
Some types of businesses can operate with a current ratio of less than one however. If inventory turns into cash much more rapidly than the accounts payable become due, then the firm's current ratio can comfortably remain less than one. Inventory is valued at the cost of acquiring it and the firm intends to sell the inventory for more than this cost. The sale will therefore generate substantially more cash than the value of inventory on the balance sheet. Low current ratios can also be justified for businesses that can collect cash from customers long before they need to pay their suppliers.
Current ratio of companies in the Public Utilities sector on NYSE compared to Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp
Companhia de Saneamento B??sico do Estado de S??o Paulo-SABESP provides basic and environmental sanitation services, and supplies treated water and sewage services on a wholesale basis to residential, commercial, industrial, and governmental customers in the state of S??o Paulo. It provides water supply, sanitary sewage, urban rainwater management and drainage, urban cleaning, and solid waste management services, as well as related activities, including the planning, operation, maintenance, and commercialization of energy. As of December 31, 2016, the company provided water services through 8.7 million water connections to approximately 24.7 million people; and sewage services through 7.1 million sewage connections to approximately 21.2 million people, as well as operated 73,015 kilometers of water pipes and water transmission lines, and 50,097 kilometers of sewer lines. It also offers water and/or sewage services to other municipalities through special purpose companies. The company was founded in 1954 and is headquartered in S??o Paulo, Brazil.
- Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp, Rua Costa Carvalho, 300, Sao Paulo 05429-900, Brazil