Define current ratio and quick ratio. Discuss what the liquidity ratios reveal about the company financial health, including any description of trend analysis, benchmarks, standard measurements or other types of analysis used once the ratio amount is known. 20182017IndustryAmountsAnswerAmountsAnswerAverageLiquidity ratios$Current Ratio2.205,283.41.25Current Assets12,494.21.7249$Current Liabilities5,684.24,220.7Quick Ratio, orQuick Assets9,630.91.693,561.30.841.269$$"Acid Test"Current Liabilities5,684.24,220.7

Current ratio: Current ratio is used to determine the relationship between current assets and…

Answered: 2018 2017 Industry Amounts Answer…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Define current ratio and quick ratio. Discuss what the liquidity ratios reveal about the company financial health, including any description of trend analysis, benchmarks, standard measurements or other types of analysis used once the ratio amount is known.

2018
2017
Industry
Amounts
Answer
Amounts
Answer
Average
Liquidity ratios
$
Current Ratio
2.20
5,283.4
1.25
Current Assets
12,494.2
1.7249
$
Current Liabilities
5,684.2
4,220.7
Quick Ratio, or
Quick Assets
9,630.9
1.69
3,561.3
0.84
1.269
$
$
"Acid Test"
Current Liabilities
5,684.2
4,220.7

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