Current ratio : A part of liquidity ratios , current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. The formula to calculate current ratio is, Current Ratio = Current Assets Current Liabilities Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities. Current Assets : Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets. To identify: The three factors that will decide if the company’s current ratio is good or bad.

Question

Want to see the full answer?

Answer 1

Question

Chapter 13, Problem 4DQ

To determine

Current ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

The formula to calculate current ratio is,

Current Ratio=Current Assets Current Liabilities

Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Assets: Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets.

To identify: The three factors that will decide if the company’s current ratio is good or bad.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Can you provide the valid approach to solving this financial accounting question with suitable standards?

Financial Accounting Question

Can you help me solve this general accounting problem using the correct accounting process?

Answer 2

Question

Chapter 13, Problem 4DQ

To determine

Current ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

The formula to calculate current ratio is,

Current Ratio=Current Assets Current Liabilities

Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Assets: Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets.

To identify: The three factors that will decide if the company’s current ratio is good or bad.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 13, Problem 4DQ

To determine

Current ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

The formula to calculate current ratio is,

Current Ratio=Current Assets Current Liabilities

Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Assets: Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets.

To identify: The three factors that will decide if the company’s current ratio is good or bad.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 13, Problem 4DQ

To determine

Current ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

The formula to calculate current ratio is,

Current Ratio=Current Assets Current Liabilities

Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Assets: Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets.

To identify: The three factors that will decide if the company’s current ratio is good or bad.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 13, Problem 4DQ

To determine

Current ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

The formula to calculate current ratio is,

Current Ratio=Current Assets Current Liabilities

Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Assets: Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets.

To identify: The three factors that will decide if the company’s current ratio is good or bad.

Answer 6

Chapter 13, Problem 4DQ

To determine

Current ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

The formula to calculate current ratio is,

Current Ratio=Current Assets Current Liabilities

Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Assets: Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets.

To identify: The three factors that will decide if the company’s current ratio is good or bad.

Answer 7

Chapter 13, Problem 4DQ

To determine

Current ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

The formula to calculate current ratio is,

Current Ratio=Current Assets Current Liabilities

Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Assets: Every company has some assets which need to be convertible in less than one year or during current accounting period. Those assets are called current assets.

To identify: The three factors that will decide if the company’s current ratio is good or bad.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 13 - Prob. 1MCQ Ch. 13 - Prob. 2MCQ Ch. 13 - Prob. 3MCQ Ch. 13 - Prob. 4MCQ Ch. 13 - Prob. 5MCQ Ch. 13 - Prob. 1DQ Ch. 13 - Prob. 2DQ Ch. 13 - Prob. 3DQ Ch. 13 - Prob. 4DQ Ch. 13 - Prob. 5DQ

Solution Summary: The author explains that type of business, composition of current assets, and turnover rate determine whether a company's current ratio is good or bad.

Videos

Want to see the full answer?

Chapter 13 Solutions