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Use the following ratios to evaluate a company's ability to pay current liabilities:

Working Capital Ratio

Current Ratio

Acid-test Ratio

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15y ago

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What ratio measures a company's ability to pay current liabilities?

current ratio


If current liabilities are 7714 and total liabilities are 18187 what is the ratio of current liabilities to total liabilities?

Current Liabilities to Total Liabilities Ratio = Current Liabilities / Total Liabilities Current Liabilities to Total Liabilities Ratio = 7714 / 18187 Current Liabilities to Total Liabilities Ratio = 0.42 or 42%


What quick ratio indicates?

Quick ratio indicates company's liquidity and ability to meet its financial liabilities. Formula of quick ratio = (Current assets - Inventory)/Current Liabilities


What is a current piece of Australian legislation that has relevance to the workplace and a companys ability to reach efficiency targets?

the north place


What is called a financial ration that measures the ability to pay current liabilities with liquid assets?

The financial ratio that measures the ability to pay current liabilities with liquid assets is called the "current ratio." It is calculated by dividing a company’s current assets by its current liabilities. A higher current ratio indicates better liquidity and financial health, suggesting that the company can easily meet its short-term obligations. A ratio below 1 may indicate potential liquidity problems.


What do current liabilities mean in accounting?

Current Liabilities in accounting are amounts that are owed by a business. The two types of current liabilities are short-term and long-term liabilities.


What firm's current liabilities?

Current liabilities are those liabilities and payables that would be paid withing 12 months


What is schedule of changes in working capital?

Working Capital is a measure of a company's short term liquidity or its ability to cover short term liabilities. Working capital is defined as the difference between a company's current assets and current liabilities.


How do you solve for level of current liabilities when you have the current assets current ratio and quick ratio?

To solve for current liabilities using the current assets, current ratio, and quick ratio, start by using the current ratio formula: Current Ratio = Current Assets / Current Liabilities. Rearranging this gives you Current Liabilities = Current Assets / Current Ratio. Next, use the quick ratio formula: Quick Ratio = (Current Assets - Inventory) / Current Liabilities to find inventory, and then substitute this back into your equations to isolate and solve for current liabilities.


What is current liabilities to total assets ratio?

Current liabilities to total assets ratio is the comparison between total assets in business with current liabilities in business.


What is the difference between current assets and current liabilities?

Current assets are resources that a company owns and can convert into cash within a year, such as cash, inventory, and accounts receivable. Current liabilities are debts and obligations that are due within a year, such as accounts payable and short-term loans. The difference between current assets and current liabilities is known as working capital, which represents the company's ability to meet its short-term financial obligations.


What do current liabilities include?

Current liabilities included all liabilities payable in current fiscal year like accounts payable, current portion of long term liability etc.