For example, a U.S. company might agree to buy ... weeks, months, etc.). The formula is as follows: Annualized Forward Premium = [(Forward Rate - Spot Rate) ÷ Spot Rate] × (360 ÷ n) × 100% ...

For example, a company may have a very high current ratio, but its accounts receivable may be very aged, perhaps because its customers pay slowly, which may be hidden in the current ratio.