over the period from 2018 to 2019, boxing boxing's
short term liquidity conditions:
a) improved
b) got worse
c) remained the same
d) nobody these above.
Homework Answers
| Short term liquidity condition indicates company’s ability to repay current liabilities with current assets. | ||||||||
| Short term liquidity can be assess by calculating current ratio | ||||||||
| Current ratio | Current assets/Current liabilities | |||||||
| 2018 | 2019 | |||||||
| Current assets | 100 | 160 | ||||||
| Current liabilities | 110 | 145 | ||||||
| Current ratio | 0.91 | 1.10 | ||||||
| Current ratio in 2018 was less than 1 indicating insufficient current assets available to repay current liabilities | ||||||||
| However in 2019 current ratio improved to 1.10 indicating current assets were higher than current liabilities | ||||||||
| Thus, it indicates that short term liquidity of company improved from 2018 to 2019 | ||||||||
| Thus, option (a) is correct | ||||||||
Add Answer to:
over the period from 2018 to 2019, boxing boxing's
short term liquidity conditions:
a) improved
b)...
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of these companies by calculating the current and quick ratios, by
averaging their rests over the past 3 years. Make your comments
from the perspective of a supplier or banker.
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