Chapter 17, Problem 4DQ

To determine

Concept Introduction:

Current ratio: The current ratio can be defined as the ratio of total current assets to total current liabilities. A current ratio is a measures that a company’s ability to pay short-term and long-term obligations.

A current ratio is calculated as under –

$Currentratio=\frac{Totalcurrentassets}{Totalcurrentliabilities}$

To discuss:

Three factors that would influence your evaluation as to whether a company’s current ratio is good or bad