Entities, despite the level of profitability, can fail if they cannot meet obligations to creditors in the short term. Liquidity ratios can be calculated from a company's balance sheet to determine its ability to meet short-term credit liabilities. In most cases, the higher the resulting ratio, the more willing the firm is to pay its obligations to creditors in the short term (Gibson, 2011, p. 210. Vail Resorts' daily credit sales were 22 .5 in 2010, compared to 21.7 days in fiscal 2009 (MSN Money, 2011). This suggests that the average number of days required to collect debts has steadily increased, conveying a negative trend in the degree of collection control. of Accounts Receivable Debt days outstanding for fiscal year 2010 increased 47 percent over 2008. However, the ratio's extraordinarily high results may not be a particularly reliable measure of liquidity due to the ski area's largely seasonal operating nature The receivables turnover ratio uses net sales and average gross receivables data to produce a result more indicative of their liquidity in 2008 was 24.58 times per year, according to MSN Money (2011). ), produced revenue of 18.05 times per year. Accounts receivable were reconciled 15.56 times per year in 2010. The negative trend appears to have dissipated when examining fiscal 2011 quarters; the most recent calculations show a turnover of 28.83 times (Morningstar, 2011). The primary asset used to evaluate the ability to repay short-term debt is inventory, which represents 28% of Vail Resorts' current assets in 2010. For that year, it would have taken 25.57 days to deplete levels of inventory based on sales data. ...... middle of document ......mbol=US%3aMTNMTN - Vail Resorts Inc Financial Reports - Forbes.com. (2011, August 31). Forbes.com. Retrieved August 31, 2011, from finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=mtnMTN Competitors | Vail Resorts, Inc. Stocks - Yahoo! Finance. (2011, August 31). Yahoo Finance. Retrieved August 31, 2011, from finance.yahoo.com/q/co?s=MTN+CompetitorsVail Resorts Inc. MTN Fourth Quarter 2010 Earnings Call Transcript. (2010, September 23). Morningstar Stocks, Mutual Funds, Hedge Funds, ETF Investment Research. Retrieved August 31, 2011, from http://www.morningstar.com/earnings/earnings-call-transcript.aspx?t=MTN&culture=en-US&pindex=8&qindex=11SEC.gov. (2009, September 24). Module10k.htm. United States Securities and Exchange Commission (home page). Retrieved September 2, 2011, from http://www.sec.gov/Archives/edgar/data/812011/000081201109000030/form10k.htm