It depends on the nature of business as well as the capital intensity of the business if business is capital intensive the high current ratio required otherwise it is not required to maintain high current ratio
Formula for current ratio is as follows: Current ratio = Current assets / current liabilities
The ratio between current assets to current liability is called "Current Ratio".
Current Ratio = Current Assets / Current Liabilities
Current ratio = current assets / current liabilityCurrent ratio = 10000 / 2000current ratio = 500%
I will not actually work the problem for you, however, I will give you the formula to find the current ratio and the quick ratio. Current Ratio = Current Assets / Current Liabilities The quick Ratio is Quick ratio = (current assets - inventories) / current liabilities Use the numbers you provided above to fill in the blanks and you should get the current ratios and quick ratios with no problem. / = divided by
1.26 is the ratio of 126 to 100 .126/100 = 63/50
Formula for current ratio is as follows: Current ratio = Current assets / current liabilities
the two ratios that measure liquidity is acid test and current ratio. the acid test ratio is current assets- stock/ current liabilities the current ratio is current assets/ current liabilities
current ratio and acid test ratio are examples of liquidity ratios'. current ratio is current asset's/ current liabilities. acid test ratio is current assets- stock / current liabilities.
The ratio between current assets to current liability is called "Current Ratio".
Current Ratio = Current Assets / Current Liabilities
The quick ratio smaller than current ratio reflects that how much quick your organization is, in paying short-term liabilities. That is why inventories are deducted from current assets while calculating Quick ratio. Typically, a Quick ratio of 1:1 or higher is a good and indicates, a company does not have to rely on sale of inventory to pay the short-term bills, while as current ratio of 2:1 is considered good in order to provide a shield to the inventory.
current ratio = current asset divided by current liability
liquidity ratios include current ratio (which is current assets/current liabilities) and acid test (which is current assets- stock/current liabilities.) liquidity ratio's shows how good a business is a paying off its debts. hope this helps.
no they are not the same. the current ratio is current assets/current liabilities. but liquidity ratio or acid test ratio is current assets - stock/current liabilities. liquidity ratio shows you how able a business is to pay off its debt when stock is taken out of the equation.
Current ratio = current assets / current liabilityCurrent ratio = 10000 / 2000current ratio = 500%
this ratio analyzes whether a company can pay off its short-term obligations using its current assets. generally, the ideal current ratio for a company is considered to be 2.00. current ratio is calculated using the following formula:Current ratio = Current assets / Current liabilities