Which of the following statements is true? A. The use of the current ratio does not...
Which of the following statements is true?
A. The use of the current ratio does not make it possible to compare companies of different sizes.
B. A current ratio of 1.2 to 1 indicates that a company’s current assets are less than its current liabilities.
C. All companies, regardless of size, should have a current ratio of at least 2:1.
D. The current ratio is a more dependable indicator of liquidity than working capital.
Homework Answers
Correct Answer: C) All companies, regardless of size, shoulf havr a current ratio of at least 2:1
Reason : Current Ratio is the ratio between Current Assets and Current Liability. A 2:1 ratio is ideal as it states that company has double Current Assets as compared to Current Liabilities , it shows company has sufficient funds to pay its liabilities.
In case of any issue or doubts, please do comment below
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Which of the following statements is true?
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1. calculate current ratio? 2. calculate the quick ratio of this company? 3. 3. part 3...
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
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On December 31, 2021, Sandhill Company had $1 million of current assets and $810,000 of current liabilities. On the same day, Indigo Company had $340,000 of current assets and $150,000 of current liabilities. Calculate the working capital and current ratio for both companies. (Round current ratio answers to 2 decimal places, eg. 1.76:1) Indigo Sandhill Working Capital $ Current Ratio Which liquidity measure is more relevant? liquidity measure is more relevant.
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
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