When interpreting financial ratios:

[mia]

Question 1

To best measure the liquidity of a business:
◦ calculate the current ratio
◦ calculate the working capital
◦ calculate the leverage ratio
◦ calculate both the working capital and current ratio

Question 2

When interpreting financial ratios:
◦ all of these apply when interpreting financial ratios
◦ a value of 1 is normal/desirable only with the acid-test ratio
◦ a business should track progress over time and compare to industry standards
◦ just one statistic does not give the total picture

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[mia]

Gracias!

[essyface1]

Thanks for the timely response, appreciate it