3. CURRENT RATIO Explain what it means for a firm to have a current ratio of...
3. CURRENT RATIO Explain what it means for a firm to have a current ratio of .50. Would the firm be better off with a current ratio of 1.50? What if it were 15.0? Explain your answers.
Homework Answers
Current ratio is the current assets divided by current liabilities of the company. It measures the company's ability to pay short term obligations. A very low current ratio would indicate poor liquidity of the company and that it may default on its obligations.
If a company has current ratio of 0.5, it is suffering from poor liquidity and may not be able to pay off its shorth term debts.
The same company would be better off with a current ratio of 1.5 as it has enough current assets to pay off the short term liabilities.
A current ratio as high as 15 would indicate inefficient use of current assets. As an example, this might be due to huge cash reserved with the company that the company does not know how to use.
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3. CURRENT RATIO Explain what it means for a firm to have a
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1. calculate current ratio?
2. calculate the quick ratio of this company?
3.
3.
part 3 is complete in 2 pictures ..
4. what is compro' debt ratio?
5.
6. what is amount of working capital?
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please please solve all 7 part. I really need it.
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[The following information applies to the questions displayed below.) Shown below are selected data from the balance sheet of Compros, a small electronics store...
3. Christy would like to improve the current ratio of her firm, which is now 0.5, so that she will have a better chance of obtaining a working capital loan. Which of the following options would improve her current ratio? a. use cash to pay off notes payable b. collect some of her accounts receivables c. purchase additional inventory on credit d. borrow short -term funds to pay off some payables
uiek ratio to exceed the current ratio? iy moou the current ratio? 15. Interpret a working capital requirement of S0. PROBLEMS For the problems, CCC-cash conversion cycle, DSo days' sales outstanding, DIH ld, and DPO days' payable outstanding. 1.) Suppose that a firm has a 30-day DSO. Determine the firm's DIlH if the operating cycle is days' inventory a. 30 days b. 60 days c. 80 days 2. Suppose that a firm has a 50-day DIH and a 30-day DPO....
1. calculate current ratio?
2. calculate the quick ratio of this company?
3.
3.
part 3 is complete in 2 pictures ..
4. what is compro' debt ratio?
5.
6. what is amount of working capital?
7. what does the working capital of company show?
please please solve all 7 part. I really need it.
thanks
[The following information applies to the questions displayed below.) Shown below are selected data from the balance sheet of Compros, a small electronics store...
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