Miller Corporation has a current ratio of 1.1. Ron has always been told that a corporations current

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Miller Corporation has a current ratio of 1.1. Ron has always been told that a corporation’s current ratio should exceed 2.0. Miller argues that its ratio is low because it has a minimal amount of inventory on hand so as to reduce operating costs. Miller also points out that it has significant available lines of credit. Is Ron still correct? What do some companies do to compensate for having fewer liquid assets?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Financial Accounting Tools for business decision making

ISBN: 978-0470534779

6th Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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