Question

RATIOS 2019 2018 2017 Liquidity Ratios Current ratio (Current asset/current liabilities)                         

RATIOS

2019

2018

2017

Liquidity Ratios

Current ratio (Current asset/current liabilities)

                             0.853

                             0.898

                             0.907

Acid Test Ratio (Curr. asset - Inventory)/ Curr. liab

                             0.588

                             0.647

                             0.607

Cash ratio: Cash and Cash equivalents / Current Liabilities

                             0.056

                             0.171

                             0.190

What does the about ratio say about the company

Homework Answers

Answer #1

Current ratio :

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its currentdebt and other payables

Acid test ratio

The acid-test, or quick ratio, compares a company's most short-term assets to its most short-term liabilities to see if a company has enough cash to pay its immediate liabilities, such as short-term debt. The acid-test ratio disregards current assets that are difficult to liquidate quickly such as inventory.

Cash ratio:

The cash ratio is a measurement of a company's liquidity, specifically the ratioof a company's total cash and cash equivalents to its current liabilities.

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