Are fixed assets potentially includable in current assets? Explain. If your answer is yes, describe situations where inclusion is possible.
Answer to relevant QuestionsAre all inventories included in current assets? Why or why not?What is the appropriate use of the current ratio as a measure of liquidity?What is the rule of thumb governing the expected level of the current ratio? What risks are there in using this rule of thumb for analysis? In analysis of capital structure, how should lease obligations not capitalized be treated? Under what conditions should they be considered equivalent to debt?What does the earnings to fixed charges ratio measure? What does this ratio add to the other tools of credit analysis?
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