FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
9th Edition
ISBN: 9781119595724
Author: Kimmel
Publisher: WILEY C
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Chapter 2, Problem 2.5BE
To determine

Working capital: The measure which evaluates the ability of a company to pay off the short-term debt obligations, by computing the excess of current assets over current liabilities is referred to as working capital.

Formula of working capital:

Working capital = Current assets – Current liabilities

Current ratio: The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of one operating cycle, is referred to as current ratio.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

To determine: Working capital and current ratio for BE Farms

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