Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
7th Edition
ISBN: 9781260581256
Author: John Wild
Publisher: McGraw-Hill Education
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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,

  CurrentRatio=CurrentAssetsCurrentLiabilities

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.

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Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License