The Case Of Progressive Corporation ( Pgr )

1450 Words Aug 19th, 2015 6 Pages
1. Current ratio: Current ratio is the ratio of the current liabilities in terms of current assets of a business. This ratio determines the firm’s ability to meet out its debts over the coming period of 12 months. The firm 's ability and market liquidity to meet demands raised by creditors is indicated by this ratio. If a company 's current ratio falls within 1.5 to 2, then it indicates good short-term financial strength.
In the case of Progressive Corporation (PGR), the current ratio in the last 3 years has always been greater than 3 which is a relatively good sign for the company.
2. Quick ratio: This ratio checks the liquidity of the company. This ratio is also termed as acid test ratio. Under this ratio we compare the current liabilities of the company with its cash in hand, accounts receivable and marketable securities. This ratio checks the company’s ability to meet its short term obligations through the help of its liquid assets.
In the case of Progressive Corporation (PGR), the quick ratio in the last 3 years has always been greater than 3 which is a relatively good sign for the company.
3. Gross profit ratio refers to the Gross profit earned by the company in terms of the net sales. It is derived by dividing the gross profit after tax by the net sales of the company. In case of Progressive Corporation (PGR), the gross margin ratio is lying around 10% from the past 3 years. Maintaining the level from past 3 years is again remarkable from the side of an insurance…

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