Of these two, thequick ratio, also known as the acid test, is the conservative measure. This is because it excludesinventoryfrom assets and also excludes the current part of long-term debt from liabilities. Thus, it provides a more realistic or practical indication of a company's ability to...
The current ratio is a financial ratio that shows the proportion of a company’s current assets to its current liabilities. The current ratio is often classified as a liquidity ratio and a larger current ratio is better than a smaller one. However, a company’s liquidity is dependent on conv...
In short, a company needs to generate enough revenue and cash in the short term to cover its current liabilities. As a result, manyfinancial ratiosuse current liabilities in their calculations to determine how well—or for how long—a company is paying down its short-term financial obligations....
Find out what the price to book ratio is, how it's calculated, and why you should know about this often misunderstood metric. Learn everything you need to know here!
3,60,000. Its Current ratio is 2.4:1 and acid test ratio is 1.3:1. Calculate the value of Current liabilities, liquid assets and inventories. (c) Working Capital of a company is Rs,30,000. Its Current ratio is 2.5:1. Calculate the value of (i) Current assets, (ii) Current ...
The current ratio should be placed in the context of the company’s historical performance and that of its peers. A current ratio can be better understood by looking at how it changes over time. The current ratio is part of what you need to understandwhen investing in individual stocks, but...
What is the Current Ratio equal to?( ) A、Current Asset / Current Liability B、(Current Asset – Inventory) / Current Liability C、Cash / Current Liability D、(Total Asset – Total Equity) / Total Asset 点击查看答案手机看题 你可能感兴趣的试题 单项选择题 关于脊髓灰质炎病毒的特性描述正确的...
The main types of liquidity ratios are: Current ratio The current ratio is one of the most commonly used liquidity ratios. It evaluates how well a business can settle its immediate debts using its current assets. A current ratio greater than 1 indicates that the company has more current ...
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A current ratio below 1 means that the company doesn’t have enough liquid assets to cover its short-term liabilities. A ratio of 1:1 indicates that current assets are equal to current liabilities and that the business is just able to cover all of its short-term obligations. ...