Asset Coverage Ratio

Tag: Asset Coverage Ratio

Asset Coverage Ratio (ACR) is a measure used by companies, investors, and financial institutions to evaluate a company’s ability to meet its financial obligations. It is calculated by dividing a company’s tangible assets (such as cash, accounts receivable and inventory) by its total debt. A higher ratio indicates that the company has more financial flexibility and provides a better indication of its financial health, while a lower ratio may indicate a company is at a higher risk of financial distress. ACR is an important metric to consider when analyzing a company’s financial performance.

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Asset Coverage Ratio: Understanding Forex Trading Risk

by Penny GrimesAugust 25, 2023

The Asset Coverage Ratio or ACR is a measure used by forex investors to determine the risk associated with their investments. ACR measures the ratio of total assets to total liabilities and is an important gauge of the strength of a company’s balance sheet. It is important for forex investors to keep an eye on this ratio, as changes in it can signal increased risk for their investments. A high ACR indicates that the company is able to easily cover its debts with its current assets, while a low ACR could be an indication of liquidity problems or other financial issues. Monitoring ACR is a great way for forex traders to reduce the risk associated with investing in currency markets.